Pharos-Tribune

State News

February 13, 2014

Mayors push back on Pence tax plan

Governor open to replacing local revenue with state funds.

(Continued)

“It’s not a major breakthrough. He’s not able to promise anything,” said Matt Greller, director of IACT, who joined the mayors’ meeting with Pence. “But it’s the first step we’ve had in the right direction.

Less than a week ago, Pence sent a letter to mayors seeking support for what he’s called his top legislative priority — repealing the tax that businesses pay on equipment in order to attract development to the state. He’s courted mayors from the state’s biggest cities, meeting with them personally last week.

The pushback was almost immediate, with some of the toughest criticism of the Republican governor’s plan coming from Republican mayors who see the tax cut as a revenue-killer for critical services.

“We’ve been incredibly frustrated,” said Republican Mayor Duke Bennett of Terre Haute. “We know what will happen if this goes through.”

Bennett said most cities “are already at their breaking point.”

Indianapolis Mayor Greg Ballard, also a Republican, had been seen as a possible ally of the Pence plan since he supported the property tax caps of 2008, which went a long way toward limiting local revenue streams. Ballard disabused anyone of that notion Tuesday.

“I have been a vocal advocate for finding efficiencies and creative cost-cutting measures in local government,” said Ballard. “However, current proposals to eliminate even a portion of the business personal property tax do not take into account the impact additional revenue cuts will have on public safety, schools and the many other vital services local governments provide.”

Indianapolis stands to lose $40 million a year if the tax is repealed in full.

For months, Pence has promised that whatever plan comes out of the Legislature won’t “unduly burden” local governments, or harm homeowners who could end up paying more property taxes if the business equipment tax is repealed or lowered.

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