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December 13, 2013

THEIR VIEW: Legislators should replace tax revenue

The top priority of Gov. Mike Pence and the Republican super majority in the Indiana Statehouse for the 2014 short session has been proclaimed. The state’s GOP will fight for a major tax cut, specifically the elimination of the business personal property tax that accounts for nearly $1 billion in revenue for local governments.

Business personal property is calculated based on the value of business equipment and can range from desk and chairs to heavy machinery. According to state figures, about 16 percent of state property taxes collected come from personal property.

Republican lawmakers argue that the elimination of the personal property tax would help the state compete for new business. They point to other states, including Illinois, that have eliminated the tax. Those entrusted by the public to manage cities and school corporations, however, say the cut would devastate communities still stinging from property tax caps voted into the Indiana Constitution several years ago.

“We’re still discovering the consequences of the tax caps,” Goshen Mayor Allan Kauffman told CNHI Statehouse reporter Maureen Hayden last week after a gathering of Indiana mayors in Indianapolis. “Now they want to throw another disaster at us.”

It’s estimated that Goshen and other local governments units in Elkhart County would lose more than $7.5 million a year in revenue if the tax was repealed.

We are grateful that Kauffman, a Democrat, and the Republican majority City Council have worked together to make the city’s ends meet. It hasn’t been easy and there are still differences in philosophy, but even with the challenge of tax caps Goshen has survived without having to compromise services. If personal property tax is eliminated we worry if that can continue.

Goshen has also made great strides in improving quality of life here. We understand the position of the Statehouse Republicans and their effort to repeal the personal property tax, but we urge them to establish a plan to replenish that public revenue with additional streams. Otherwise, the positive momentum in places like Goshen will come to a screeching halt.

— The Goshen News

THE ISSUE The state's GOP will fight for a major tax cut that accounts for nearly $1 billion in revenue for local governments. THEIR VIEW Statehouse Republicans should find a way to replace the lost revenue -- otherwise, positive momentum in Indiana's cities will come to a screeching halt.

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