From the Shelbyville News:
Gov. Mike Pence's plan to eliminate the business personal property tax has prompted a number of mayors across the state to denounce the proposal.
His latest effort, a letter to mayors outlining his reasoning, hasn't met much success either.
"I know he's trying to drum up support; I don't think he's going to get it," Shelbyville Mayor Tom DeBaun said Thursday.
In Pence's letter to mayors, dated Wednesday, he wrote that "Indiana's job climate has improved dramatically in recent years. In 2013, Indiana private sector employers added 42,600 jobs to Indiana's economy, and the number of people in our labor force has grown by 33,000, the 6th best in the country.
"However, there is still work to be done. With nearly 7 percent of our fellow Hoosiers still struggling to find work, our communities need new employers to locate, grow and create new jobs."
While pointing to Indiana's advantages--a workforce with a strong work ethic, lower cost of living and improved educational attainment--Pence wrote that "the business personal property tax remains a strong deterrent to job growth."
A chart included in the letter shows Indiana's personal property tax rates for commercial equipment and industrial machinery are each 2.75 percent. Among neighboring states, Ohio and Illinois each have no personal property tax in those categories; Kentucky's tax rates are 0.15 percent on machinery and 1.81 percent on equipment; and Michigan's tax rates are 1.92 percent on machinery and 3.55 percent on equipment, but are being phased out.
"Too often, we see companies choose one of our neighboring states over us," Pence wrote. "The business personal property tax has been a significant factor in many of these instances."
But the Association of Indiana Counties disputes that.
"No one at the state or local level can name a company that did not locate to Indiana because of personal property tax," AIC Director of Government Affairs Andrew Berger wrote in an email to members. "The out-of-state competition argument is much more nuanced than is being publicly discussed. Illinois replaces the dollars for locals. Michigan must replace the dollars to locals or the personal property phase out does not occur. Ohio replaces the revenue with a different tax on businesses, which Indiana does not have. Kentucky has lower tax rates on PP but taxes more items than Indiana. Finally, local units regularly abate personal property taxes for large employers that will create jobs."
Pence reiterated in his letter that he wants tax reform, not tax cuts, and that he is committed to phasing out the business personal property tax "in a way that does not unduly burden local governments' ability to provide the the needs of their citizens."
Pence also wrote that he wants local control for adoption of any permanent phaseout of the tax, and he doesn't want the tax burden shifted to the public.
DeBaun is still concerned with the environment that might be created with the elimination of the tax.
"The legislature needs to find a way other than communities competing with each other," he said
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http://www.shelbynews.com/articles/2014/01/31/news/doc52eab7738986a413341824.txt
