The Herald Bulletin

Morning Update

Local Politics

December 17, 2013

Pence pushes for end to business tax

Dissolving tax would take $4 million from city budget

ANDERSON — Gov. Mike Pence visited the Anderson Rotary Club on Tuesday to once again make a pitch for phasing out Indiana's current business personal property tax.

Pence first said eliminating the tax was part of his agenda for the upcoming session at the Bingham Greenbaum Doll Legislative Preview earlier this month. In his push to make Indiana as appealing to businesses as possible, Pence said the tax has to go.

"I've said since day one, job creation is job No. 1," Pence said. "It's a competition for jobs out there, county by county, state by state."

He cited local competition as the biggest reason for getting rid of the tax. Illinois and Ohio do not have the tax, and Michigan is on a 12-year plan to phase its out.

The tax charges businesses for property and items like industrial machines. The state takes the money, which amounts to $1 billion, and gives it to local governments and schools.

Pence said the state will do what it can to compensate local governments but has not offered an idea for where that money might come. Instead, he said the General Assembly should decide that.

Anderson Mayor Kevin Smith said if the tax was cut off today, Anderson would lose $4 million, $2 million of which goes into the city's general fund. That fund is used to, among other things, pave streets and pay firefighters and other law enforcement. Smith said that would be a significant chunk of the overall budget.

Smith said he appreciates the governor's push to make the state as competitive as possible but thinks there needs to be a middle ground. He argues a lot of the new businesses are here thanks to individual cities.

"Most of the companies that have relocated to Indiana are usually connected to a municipality," Smith said.

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