The Herald Bulletin

Evening Update

Columns

March 23, 2014

Maureen Hayden: Longtime Pence political ally stung by business tax plan

INDIANAPOLIS — In his years as a party activist, Rushville Mayor Mike Pavey raised money and votes for fellow Republican Mike Pence, a former congressman who now occupies the governor’s office.

Beyond sharing Pence’s pro-business, small-government ideology, the engineer-turned-mayor has long felt a special kinship with the man. It was in the small city of Rushville where Pence, having flamed out in a second run for Congress, launched his conservative talk radio show 22 years ago.

The talk show was soon syndicated statewide, and it revived the man who’d been left dead politically. Pence won on his third try for Congress, and he was re-elected five times. Rushville and the surrounding Rush County went for Pence in his narrow 2012 gubernatorial victory; he won by 10 points more there than he did statewide.

Despite their history, Pavey has spent the last three months working against Pence — specifically the governor’s top legislative priority for the 2014 session.

Along with Republican and Democratic mayors statewide, Pavey has pushed back hard against Pence’s proposal to eliminate a business tax that generates about $1 billion a year for schools, libraries and local governments.

Pence and his GOP legislative allies have said eliminating the tax — levied on machinery, equipment and other property — is a sure-fire job creator. But they’ve not come up with a plan to replace the lost revenue if that doesn’t come true.

Pavey, knowing a full repeal of the tax could mean about $1 million per year in lost revenue, is worried. The property tax caps of 2008 reduced city revenue by more than 38 percent, causing serious cuts. Pavey had this description of the Pence plan for the business tax: “It felt like a professional hit. And it felt like a personal one, too.”

Pavey left his Rushville office several times during the session to lobby lawmakers to vote against two different tax rollback bills.

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