Kokomo Tribune; Kokomo, Indiana

February 7, 2014

Peru opposes ending business property tax

By Carson Gerber Kokomo Tribune
Kokomo Tribune

---- — PERU — Peru officials Monday joined a growing coalition of city and county governments expressing opposition to Gov. Mike Pence’s push to eliminate Indiana’s business personal property tax that would cut nearly a billion dollars from local governments.

Peru City Council approved a resolution condemning the governor’s proposal, saying it would significantly reduce the city’s revenue and hurt government services.

Gov. Mike Pence has said eliminating the tax is necessary because it hinders the business climate in Indiana.

Peru Mayor Jim Walker said the city could lose up to $1.7 million, or 25 percent of its levy, if the Indiana general assembly votes to abolish the tax. He said Miami County could lose over $3 million.

“They’re not talking about any replacement revenue,” he said. “They’re just saying they want to do away with it, and they’ll figure out the rest of it later. I think that’s an odd way to do it … The short story is if we lose that money, services will suffer.”

Walker said the proposal is an example of the state’s micromanagement of local governments, since cities and counties already have the option to offer businesses tax abatements on their personal property.

“It is my belief that the decision concerning business personal property tax should be up to the local elected officials, not the state,” he said. “After all, local officials have a better idea of what their individual communities’ needs and desires are.”

The resolution approved Monday will be sent to the Indiana Association of Cities and Towns, which is compiling similar resolutions passed by local governments all over the state to promote its campaign called “Replace, Don’t Erase.”

Matthew Greller, executive director of the association, said it put the call out last week to local governments opposed to the tax elimination to pass resolutions stating their resistance.

So far, more than 25 cities and towns have passed resolutions, including Fairmont, Monticello and now Peru.

Greller said the association is pointing legislators to the list of resolutions to show local governments’ opposition to the proposal.

Last week, both the House and Senate passed their respective versions of a bill that would change how the tax is structured, but neither bill calls for a complete elimination of the tax on business personal property.

Even so, Greller said either version of the bill would eventually lead to the full elimination of the tax if approved and painfully reduce local government revenue.

That revenue loss would come on the heels of the state’s approval of property tax caps, which also substantially reduced money coming in to the coffers of cities, counties, schools, townships, libraries and other local taxing units.

“We can’t afford to lose one more dollar of revenue to local governments,” Greller said. “It’s something that’s not sustainable. We’d be seeing cuts to public safety and other basic services cities and towns provide.”

The Indiana associations of teachers, firefighters, police, counties and libraries have also joined in the “Replace, Don’t Erase” campaign, along with more than 12 other statewide organizations.

“It has been a very disappointing week to see that so many lawmakers are not willing to seriously consider the consequences these actions will have on Indiana’s cities, towns, counties, townships, libraries and schools,” reads a statement on the Indiana Association of City and Towns website.