INDIANAPOLIS – Despite intensifying opposition from mayors around the state, Gov. Mike Pence is re-affirming a pledge to eliminate a tax on business equipment worth $1 billion to local governments.
Pence said he wants to eliminate the tax to boost job creation, but he still has not detailed plans to replace lost tax revenue for communities or prevent a shift in the tax burden to homeowners and other property owners.
During a Statehouse press conference Thursday, Pence said he’s “in negotiations” with legislative leaders. The House and Senate have bills that would begin to phase out the business personal property tax in different ways, but neither bill replaces the lost local revenue.
Pence said the legislation need to be improved but declined to elaborate.
“I know you all want me to talk about details,” he said after repeated questions about how he’ll avoid what he calls “undue harm” to local governments. “I don’t want to negotiate this in public.”
The governor’s comments came the same day an independent report projected significant lost tax revenues for local governments and $376 million worth of increased taxes on homeowners, farmers, landlords and other property owners should the business tax be eliminated.
Those property owners would see tax bills increase 12 percent or more in 24 of Indiana’s 92 counties, according to the report issued by the non-partisan Indiana Fiscal Policy Institute.
The report also found that eliminating the tax would have minimal effect on luring new jobs to the state, but it could pit Indiana communities against each other in attempts to attract business development.
Pence told reporters he had not read the report but believed it would add to the ongoing debate.
Republican and Democratic mayors from around the state have voiced strong opposition to eliminating the business personal property tax, which would roll back a revenue stream that funds local governments, schools, and libraries.