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February 13, 2014

Mayors push back on Pence tax plan

Governor open to replacing local revenue with state funds.

INDIANAPOLIS — Mayors from across the state are in open revolt against Gov. Mike Pence’s plan to cut a tax on business equipment, challenging his promises to protect their communities from the plan’s effects.

On Tuesday, about 50 mayors from big cities and small towns crowded into a press conference to denounce the plan that would eliminate $1 billion in revenue collected by local governments, schools and libraries.

The mayors — Republicans and Democrats — called for the Legislature to kill two Pence-supported bills that would begin to wind down the tax unless the state comes up with revenue to offset the cut.

“I’ve never seen mayors so united in trying to defend our communities,” said Angola Mayor Richard Hickman, president of the Indiana Association of Cities and Towns, known as IACT.

The pressure may be working.

Hours after the press conference, Pence met with a handful of mayors and told them he’s “open” to the idea of the state replacing revenues lost under the Senate’s version of his plan. The Senate bill would exempt smaller companies from paying the business equipment tax.

“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,” Pence said.

That brought a conciliatory response from some of the mayors in the meeting. Kokomo Mayor Greg Goodnight called Pence’s gesture progress. “However, he didn’t indicate a replacement for those funds, so this still has to go through the legislative process,” Goodnight said.

Local leaders remain wary. Pence offered the mayors no details on a source of the replacement money. Nor would his pledge cover the House version of the bill, which proposes giving counties the authority to kill the business equipment tax.

And there’s no promise from legislative leaders that they’ll go along with the idea. To date, the Legislature’s fiscal leaders have vowed not to re-open the budget process, which is needed to find state replacement revenues.

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