Vigo County now collects 26 percent of its property tax from business equipment. Elimination of the tax would reduce revenue to the county by $3.2 million, the city by $4.5 million, the Terre Haute Sanitary District by $935,838, Vigo County schools by $3.2 million and the Vigo County Public Library by $636,475. People who lead and use those services must wonder how closely state officials considered the local ramifications.
If the powers that be didn’t recognize the consequences before the backlash, they do now.
Pence and Bosma have not backed away from the tax cut, but acknowledged that a replacement source must be found for funding local services, just as Indiana’s neighbor states have done. Pence and Bosma don’t have a definite source planned. The governor told the Times of Northwest Indiana he won’t “prejudge that debate” and is leaving the solution to state legislators, who convene next month. Maybe the tax could be phased out gradually, he speculated, or maybe counties could be given the option of eliminating it individually. Still, how will the state replace the funding for towns, and libraries and other recipients?
The Times reported Pence deflected follow-up questions about whether he would accept a plan to hike local income taxes to offset funding lost from the equipment-tax cut for corporations and businesses. The burden is “going to be pushed onto local homeowners,” Terry Goodin, a Democrat state representative and superintendent of schools in Crothersville, predicted in a Kokomo Tribune interview. “It’s a shift from the corporations to local communities, and that’s going to have a huge impact.”
Indiana has already cleared a wide path for business growth. The business personal property tax should be moved farther down the highway, until a more reasonable alternative is found.
— Tribune-Star, Terre Haute