TERRE HAUTE, Ind. (WTHI) – Indiana mayors scored a major victory at the Statehouse Thursday.
News 10 has reported about the governor’s proposal to eliminate Indiana’s Business Personal Property Tax. Terre Haute Mayor Duke Bennett is among several mayors who told lawmakers how this would cripple local governments.
This compromise came at the final hours of the 2014 legislative session.
It greatly reduces the impact the tax will have on local government revenues, and it gives counties options they’ve never had before. Now the questions is, does this compromise mean Indiana counties will be competing even more with one another for economic development?
Eliminating the Business Personal Property Tax would have annually cost Hoosier local governments $1-billion. Mayor Duke Bennett said the city would have lost about $4-and-a-half million per year, which would have forced him to make public safety cuts. But he says Hoosier mayors working together opened the eyes of enough state lawmakers to reach a compromise.
“We took it from about $1 billion to about $6 million, and that’s if communities even decide to implement it,” Mayor Bennett said.
State Representative Alan Morrison says the compromise has four key components:
-it lowers the state corporate income tax to 4.9% over time.
-counties can exempt new equipment.
-counties can exempt equipment under $20,000.
-governments can pass “super abatements” of up to 20 years, which doubles current abatements given at a 10 year clip.
Morrison is among the Republicans who think the compromise reached is good for Indiana. “Our local government officials had a lot of input into this, and the result, i think, is a good piece of legislation.”
Counties within Indiana already compete with one another for economic development. This compromise gives local governments autonomy in how business personal property taxes are handled within individual communities. Mayor Bennett is concerned this part of the compromise could hurt parts of the state that work together to attract business.
“We just want to work together, and this definitely pits counties against one another. They don’t think so. The mayors and counties tried telling them otherwise, so there’s a bit of disconnect on that one,” said Mayor Bennett.
Mayor Bennett feels the mayors won the battle this time, but he anticipates that Governor Pence could bring this issue up again next session. Morrison points to what’s called a Blue Ribbon Commission. That commission will study all of the impacts of the various tax cuts passed by the General Assembly.