INDIANAPOLIS – Mayors from across Indiana are gearing up for a fight to protect a state business tax that produces nearly $1 billion in annual revenue for local governments, libraries and schools.
Republican leaders in the Statehouse say getting rid of the business personal property tax would lure manufacturers and other big job-creators to the state. But a chorus of mayors say the loss of revenue would hit communities already struggling with the impact of state-imposed property tax caps.
“We’re still discovering the consequences of the tax caps, and now they want to throw another disaster at us,” said Goshen Mayor Allan Kauffman. Goshen and other local governments units in Elkhart County would lose more than $7.5 million a year in revenue if the tax was repealed.
“It’s a crazy idea,” said Batesville Mayor Richard Fledderman, who lives in a small rural county that would lose more than $560,000 in tax revenue. “I find it hard to believe that they would even consider doing this, with the impact that tax caps have already had on communities.”
Indiana companies pay nearly $1 billion a year to local governments, including school and library districts, through a tax on machinery, computers, furniture and other equipment.
A bipartisan group of mayors, meeting in Indianapolis Wednesday to talk about their legislative priorities for the next session, were vehement in their opposition to a proposal to eliminate the tax that’s been identified as a top priority for GOP leaders who control the Statehouse.
Since the General Assembly passed legislation in 2008 capping local property taxes, Indiana’s cities and towns have lost about $250 million annually in revenue. Many communities have cut services in response.
The word “crazy” was used by several mayors at the meeting to describe their sentiment about the tax cut proposal, which has strong backing from the Indiana Chamber of Commerce. While no bill has been drafted yet, legislation is expected to be filed early in the 2014 session.