Kokomo Tribune; Kokomo, Indiana

State News

December 14, 2013

Pence has few answers on tax cut plan

INDIANAPOLIS (AP) — Gov. Mike Pence said Friday he has high hopes that his proposed elimination of Indiana’s business personal property tax will create more jobs, but he has few answers on how he’ll secure the $1 billion cut.

Pence said business leaders across the state have told him eliminating the tax would be one of the best ways to create jobs. The tax is levied on business equipment and accounts for a large portion of local tax collections.

“I acknowledge there have been voices in opposition to phasing out the business personal property tax,” Pence said. But “what I have heard is people advocating, within a broad range of tax options, that this is actually a good idea in a state where we have such a strong manufacturing economy.”

The elimination of the personal property tax is at the center of a second-year agenda broadly focused on jobs and education. Pence delivered the core proposal in a speech last week and has slowly been rolling out more specifics in events across the state before lawmakers return for their 2014 session.

Pence has been careful not to call the elimination of the tax a “cut”, instead labelling it “reform” and has said he would like to find a way to replace those lost tax dollars. He has also said he would phase out the tax over time, but he has not said how long.

Local leaders and groups representing the state’s cities and towns have come out against the proposal, saying it would be too big a hit for local governments already stretched too thin.

“The complete giveaway of personal property AV (assessed value) does not guarantee job creation. I doubt fast food restaurants or liquor stores will hire more people because they are no longer taxed on their personal property,” said David Bottorff, executive director of the Association of Indiana Counties.

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