Rushville Republican

News

December 6, 2013

Briefs

(Continued)

A study last year for the Regional Chamber of Commerce of Northeast Indiana found that eliminating the tax would impact almost all Indiana communities but would cause significant stress in those with large manufacturing bases. In Whiting, for example, where the BP oil refinery is located, 60 percent of the city’s revenue stream comes from the business personal property tax.

Both the Association of Indiana Counties and the Indiana Association of Cities and Towns have come out against the wholesale repeal of the tax unless there is replacement revenue, saying it would force local communities to further cut services. They also worry about impact of the tax repeal on homeowners and other property owners. Purdue University economist Larry DeBoer estimates that property owners across Indiana would see an automatic increase of more than $450 million in property taxes, because of the way Indiana’s complicated property tax cap system works.

“This is a bigger issue than the property tax caps, from the financial impact on local communities,” said IACT executive director Matt Greller.

Rep. Tim Brown, the Republican chairman of the House Ways and Means Committee, said Wednesday that he supports the concept of eliminating the business personal property tax as “an economic incentive” for businesses to invest in the state. He cited the recent drop in the state’s unemployment rate to 7.5 percent, the lowest it’s been since late 2008.

“We’re just crawling toward reducing the unemployment rate, so we want to see more economic activity,” Brown said. “We know business personal property tax affects that.”

But Brown also acknowledged the concerns of local communities over the lost revenues. “We’re looking at options for them,” Brown said.

It’s not clear what those are. One idea being floated is to allow communities to raise their local option income tax. That idea prompted groans from mayors gathered at Wednesday’s meeting, who fear they’ll be blamed for raising taxes while legislators take credit for cutting them.

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