When the state’s constitutional property tax caps took effect in 2008, Indiana’s economic situation was a lot rosier than it is now, and it’s possible Hoosiers were more concerned about reigning in property tax increases than they were in collateral damage from the caps themselves.
The damage, however, has been pronounced for local governments statewide, which are now receiving around $2 billion less in annual property tax revenue than they were prior to the caps taking effect.
Part of this is no doubt due to the massive, recessionary deterioration in property values, but nonetheless, schools and local governments are struggling.
All of which brings us to the present day and the fight in the Indiana General Assembly over Gov. Mike Pence’s main agenda item, the elimination of business personal property tax.
Kokomo Mayor Greg Goodnight has been at the forefront of the opposition, which is unsurprising, given that the city of Kokomo would lose about $12 million in annual revenue if the tax is eliminated.
But as CNHI Statehouse Bureau chief Maureen Hayden notes, local officials from across the state have been remarkably unified in opposition, not only to full elimination, but also to State Rep. P. Eric Turner’s proposal to let individual counties decide whether to eliminate the tax.
At a media event sponsored by the Indiana Association of Cities and Towns, Goodnight was joined by officials from towns where the elimination of the tax could very well be seen as an economic advantage, places like Nashville, Ind., where very little business personal property tax is paid.
Goodnight said Thursday that even in places which could enjoy a theoretical economic development advantage, local officials worry eliminating the tax would be counterproductive in the long run.
“It’s a losing proposition,” Goodnight said. “Even in communities that are currently not dependent on [BPPT], people realize that this is a long-term loss.”