From the Shelbyville News:
As he sat down to listen to Indiana Governor Mike Pence give the State of the State address Tuesday night, Shelbyville Mayor Tom DeBaun did so hoping to hear some more explanation about the governor's plans on "phasing out" the business personal property tax.
DeBaun said the only essential mission of local government is to provide services to its residents.
"For Shelbyville and other cities that's trash pick-up, street maintenance, fire and police services, parks and recreation opportunities, treatment of waste and other functions that impact the quality of life of each resident in some way. In order to perform those functions, local government relies on a mix of tax income and user fees. The income from taxes is a mix of income and property taxes. Those property taxes are generated by the assessed value of each of our homes, the land the homes sit on and the value of the structures and land owned by various businesses and industries. Additionally, business and industries pay a tax on their personal property. Things like office equipment, presses and other machinery that is used in the production of their respective product," DeBaun said.
DeBaun said in Shelby County, the business personal property tax generates over approximately $8.9 million, which is 22 percent of the county's net property tax that is distributed to the local units of government to be used for the provision of the basic services and to perform other functions that are related to the growth and development of Shelbyville.
"The City of Shelbyville receives over $3 million in distributions according to the Assessor's office," DeBaun said.
DeBaun said of all the pending legislation up to this point, the Business Personal Property Tax elimination has the greatest potential to "cripple local government."
"And by local government I don't just mean the City of Shelbyville. It will have an impact upon every school, township, library and unit of local government in the state. Directly or indirectly that most likely will impact volunteer fire departments, functions performed by township trustees and the number and quality of services delivered by local government to the residents. I was disappointed that there was not more substance in the state of the state speech regarding this topic. The Governor specifically asked that it be eliminated but that the burden not be shifted onto the backs of the individual tax payer. I'm not sure how that can be accomplished. One current proposal at the State House includes an option to increase income taxes. Because of property tax caps the burden can't be shifted to the homeowners property tax assessment in most cases so I'm not sure what is left?" DeBaun said.
DeBaun said there has been discussion to eliminate the business tax on a county by county level, allowing each of Indiana's counties to decide the future of the tax.
"That sounds good, but each county cannot afford to do that. Some that have a tax base heavy in manufacturing, like Shelby County, most likely cannot afford that cut. If more property tax eliminations are handed down to us from the state level, as local government, we will have fewer options available to us in the structuring of development deals," DeBaun said.
...
http://www.shelbynews.com/articles/2014/01/16/news/doc52d6f219d138f362987504.txt
