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Governor backs alternative business tax cut

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Indiana Gov. Mike Pence threw his support behind House Republicans' watered-down business tax proposal Tuesday amid outcry from local leaders over the potential to damage their already cash-strapped budgets.

Pence originally sought the elimination of the state's business personal property tax, which is levied on business equipment, when he announced his 2014 legislative agenda last month. But Chris Atkins, director of the Office of Management and Budget, told members of the House Ways and Means Committee that the governor would back an alternative measure crafted by House Republican leaders.

"I'm here with you to share the governor's support for House Bill 1001," Atkins said. "He believes that while we made substantial progress on our tax climate in recent years, the business personal property tax remains an outlier that we need to deal with if we're truly going to attract jobs and investment moving forward."

The announcement marks one of the first clear signs of what the governor is seeking on an issue that's been at the center of his legislative agenda.

Pence wrote in his 2014 policy "roadmap" that he wanted to "eliminate the business personal property tax to spur new investment." But as opposition among local leaders grew, Pence began saying he would support a "phase-out" matched with undefined aid for localities.

Absent a proposal from Pence, Republican legislative leaders crafted their own proposals. House Speaker Brian Bosma, R-Indianapolis, announced the chamber's plan would give counties the option to eliminate the tax on all new business equipment.

Senate Republican leaders, including the chairs of the tax and budget committees, submitted their own plan that would eliminate the personal property tax for small businesses and cut the corporate income tax. Atkins made no mention of the Senate plan on Tuesday.

The House bill's author, Rep. Eric Turner, R-Cicero, called the business tax one of the worst for the economy because it stalls the type of business growth and expansion lawmakers should encourage.

"The problem with the business personal property tax is it taxes capital investment," he said.

Chad Pittman, executive vice president for the semi-private Indiana Economic Development Corp., said the state is at a disadvantage when competing for jobs with neighboring states such as Illinois, which have eliminated the tax.

But the complete elimination of the tax, which is used to fill local coffers, came with a $1 billion price tag and no clear way to cover the budget holes it would create at the local level.

A parade of Indiana mayors told the panel those states found ways to refund localities the money lost without the tax. Evansville Mayor Lloyd Winnecke, a Republican, noted that a referendum being placed before Michigan voters also provides for replacement funding from the state.

"We hear that surrounding states have eliminated the business personal property tax, but let's not leave out this one important piece of the question," he said.

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  • Be so glad when Pence is gone.
    Just to not let him put his name in for president.

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  1. Aaron is my fav!

  2. Let's see... $25M construction cost, they get $7.5M back from federal taxpayers, they're exempt from business property tax and use tax so that's about $2.5M PER YEAR they don't have to pay, permitting fees are cut in half for such projects, IPL will give them $4K under an incentive program, and under IPL's VFIT they'll be selling the power to IPL at 20 cents / kwh, nearly triple what a gas plant gets, about $6M / year for the 150-acre combined farms, and all of which is passed on to IPL customers. No jobs will be created either other than an handful of installers for a few weeks. Now here's the fun part...the panels (from CHINA) only cost about $5M on Alibaba, so where's the rest of the $25M going? Are they marking up the price to drive up the federal rebate? Indy Airport Solar Partners II LLC is owned by local firms Johnson-Melloh Solutions and Telemon Corp. They'll gross $6M / year in triple-rate power revenue, get another $12M next year from taxpayers for this new farm, on top of the $12M they got from taxpayers this year for the first farm, and have only laid out about $10-12M in materials plus installation labor for both farms combined, and $500K / year in annual land lease for both farms (est.). Over 15 years, that's over $70M net profit on a $12M investment, all from our wallets. What a boondoggle. It's time to wise up and give Thorium Energy your serious consideration. See http://energyfromthorium.com to learn more.

  3. Markus, I don't think a $2 Billion dollar surplus qualifies as saying we are out of money. Privatization does work. The government should only do what private industry can't or won't. What is proven is that any time the government tries to do something it costs more, comes in late and usually is lower quality.

  4. Some of the licenses that were added during Daniels' administration, such as requiring waiter/waitresses to be licensed to serve alcohol, are simply a way to generate revenue. At $35/server every 3 years, the state is generating millions of dollars on the backs of people who really need/want to work.

  5. I always giggle when I read comments from people complaining that a market is "too saturated" with one thing or another. What does that even mean? If someone is able to open and sustain a new business, whether you think there is room enough for them or not, more power to them. Personally, I love visiting as many of the new local breweries as possible. You do realize that most of these establishments include a dining component and therefore are pretty similar to restaurants, right? When was the last time I heard someone say "You know, I think we have too many locally owned restaurants"? Um, never...

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