After meeting with more than a dozen mayors today, Governor Mike Pence says he would support replacing some of the money counties would lose if the legislature eliminates or reduces a tax on business equipment.
But the governor stopped short of saying where that replacement money would come from.
“After listening to local communities across our state, I have informed legislative leaders that I am open to full state replacement revenue for local governments to cover the cost of eliminating the business personal property tax on small businesses with less than $25,000 in equipment, as proposed in Senate Bill 1,” he said in a statement. “This would ensure that any reform of this tax does not unduly burden local governments or shift the cost of this tax onto hardworking Hoosiers.”
Eliminating the business personal property tax has been on the top of the governor’s legislative agenda.
A bill the Senate is considering would erase the tax on small businesses with less than $25,000 worth of equipment, which covers about 70 percent of companies that pay the tax.
That would cost Indiana counties around a combined $30 million each year.
Terre Haute Mayor Duke Bennett says after losing millions because of property tax caps that went into effect four years ago, cash-strapped local governments aren’t in a position to lose any more revenue.
“We all are on the same page. We want Indiana to grow economically and our economies will grow because of the environment we create,” he says. “No one is disagreeing with that and maybe no one will specifically disagree that that tax should go away but we need replacement revenue.”
Kokomo Mayor Greg Goodnight says the governor’s support is a step in the right direction but it doesn’t alleviate all his fears.
“It comes down to how much is he going to push and require that that be in the final version of the legislation,” he says.
A separate House bill would give counties the option of ending the tax in hopes of attracting new businesses to the area. Pence says he also supports that plan but has not offered a way to pay for it.