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Pence open to replacing any revenue lost in tax bill

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Indiana Gov. Mike Pence said Tuesday he’s open to proposals to “fully replace” the revenue that local governments might lose under a Senate plan to cut the personal property tax for thousands of businesses across Indiana.

Pence also said in a prepared statement that he wants to avoid shifting tax burdens to homeowners and other property owners under the plan.

That means the state would have to spend as much $54.4 million annually to make up the lost revenue, according to the nonpartisan Legislative Services Agency. But the governor did not say what source of money he would use to replace the revenue.

Pence issued his statement after meeting for nearly an hour with mayors from around the state and said the money “would ensure that any reform of this tax does not unduly burden local governments or shift the cost of this tax onto hardworking Hoosiers.”

Evansville Mayor Lloyd Winnecke said that would end his and other mayors’ opposition to the Senate bill, which has passed the Senate and is under consideration in the House. He called the governor’s move “great news for communities all across Indiana.”

SB 1 eliminates the personal property tax for businesses with less than $25,000 worth of business equipment and supplies. That’s about 70 percent of Hoosier companies.

Those firms are expected to pay about $54.4 million in personal property taxes in 2016. Of that, nearly $23 million would be shifted to other taxpayers. The remaining $31.5 million would be losses for cities, counties, schools, libraries and other local governments.

However, Pence said he also supports House Bill 1001, another tax bill that would let counties choose to eliminate the personal property tax on new equipment purchases. Pence did not say he would support providing replacement money for that lost tax revenue.

The impact of that bill is harder to judge because it’s dependent on the actions of local officials and investments by businesses.

Pence said the combination of the bills “would make our communities and our state more attractive for the kind of investment that will create jobs for Hoosiers.”

“In the end, Hoosiers and our local communities will benefit as business grow and companies bring new jobs to our state,” he said.

But Winnecke said he and other local officials still have problems with HB 1001, which has passed the House and is under consideration in the Senate.

The mayors met with Pence following a news conference in which they urged lawmakers to “replace, don’t erase” the personal property tax.

Pence initially called for a complete elimination of the tax, which generates more than $1 billion for local governments. But he’s also said repeatedly he doesn’t want to “unduly burden” local communities.

On Tuesday, the bipartisan group of mayors said the governor had not offered any plans to replace the revenue for local governments. Indianapolis Mayor Greg Ballard called on the state to replace the revenue so local officials can continue to make their communities stronger.

“It is time to start focusing on building more attractive places to live,” Pence said. “Companies and people are choosing to locate in place with a high quality of life.”

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  • "Honest to Goodness"
    Aren't we tired of the unworkable patchwork of headline-grabbing tax cuts yet? We rank in the basement with respect to such metrics as health and K-12 education. Time to invest in Hoosiers--not just Indiana corporations. Companies have a vested interest in a healthy, well-educated/trained workforce with the disposable income needed to buy products and services.
  • NO
    Where do you think that state surplus comes from? The citizens, which by rights, should be used for OUR benefit, not to replace tax obligations that should rightfully be paid by businesses!! And BTW Pence will never be President/Vice President.
  • IDEA
    I have a idea, raise the local option income tax and make the workers pay for lost revenues. It is only 3%. They are going to eliminate the business tax and use our surplus tax funds that WE paid until someone helps the governor get a new tax for hard working peons.
  • Ideas? Let's see . . .
    1. Usury taxes - tax behavior that produces social costs: cigs, booze (alcohol should be sold on Sundays and Xmas, sorry those that think our laws should only be Christian based), big gulps, bloomin onions mate, Bieber records, gambling (open an Indy Casino already at Union Station), and PT Cruisers. 2. State tax break to those companies and individuals with Health Insurance (more people with health insurance less society pays for their uninsured and higher rate visits to our hospitals). 3. State tax breaks to parents with high school graduating children. More kids graduating less chance of us paying for jail later. 4. Legalize stuff - third state to legalize gambling, might as well be the third state to legalize stuff that we can tax the heck out of. Hemp production will soon be legal and will easily be achieved with the wonderful pH of our soil. Less indoor lights. 5. Stop paying private jail operators to operate empty prisons at a rate of full occupancy. 6. Stop spending money on a legal Christian crusade. AG currently spending millions of tax dollars fighting to protect discriminating and religious based law. 7. Give everyone equal rights. Gay couples typically maintain and improve their homes and businesses, employee others, and make a lot of taxable money. The less we discriminate the more money we make. If you have a religious issue to fight to instill, go to church not the Statehouse. Otherwise, enjoy your tea party.
  • Reality...
    Let's face it, people. The reality is that Mike Pence has no intention of staying in Indiana after December of 2016. He fully intends to be in Washington, DC., either as the vice-president (which would be anethema to him, but he'd take it if he had to in order to strengthen his position) or as president. He desperately understand that he needs be able to point out that, as Governor, he lowered both individual and business taxes. Let's just forget that he will lower business taxes to the detriment of everyone else...
  • Wrong
    Oh I see the money comes from thin air to give corporate welfare to business's. I'm trying that with my household budget. The Governor is wrong
  • Gov Lacks Basic Business Analysis
    Basic business analysis requires the identification of alternatives and their related cost/benefits BEFORE making a recommendation. Pence does seem to care about these basics with respect to the impacts of tax cuts. They don't seem to exist in his ideological realm. In this zero sum game of slow economic growth, the individual taxpayer will pay more for the sake of business. Lets get old "shut er down Mike" out of office ASAP.
  • Other Revenue
    1) Local governments could tighten their belts (like us!) 2) Sell alcohol on SUNDAYS...what a great idea...$$$...convenience...large sporting events are on SUNDAY 3) Also, it takes time to prepare this tax form...it's an extra task which is a pain and outdated. That's just my small business. 4) Just watched an IndyGo bus go by with ONE passenger...let's fund that too, private chauffer.
  • Finally
    Finally something that makes sense. You can't starve the local communities to be a low tax state. You want to cut the property tax? That is great, but take it out of the state surplus and not the communities. We need roads, transit, parks, and (yes) cops and firefighters.
  • "Open?"
    So Pence is "open" to replacing this lost tax revenue? Surely this means he'll raise taxes on individuals to offset -- and then blame city and county leaders for forcing him to do it. I agree with Micah. There are many other ways to attract businesses. For instance, fostering a strong class of middle and lower income families with money to spend.
  • Enough is enough
    Governor Pence, there is so much more to building more attractive places to live than cost cutting. Skilled millenial talent doesn't care much at all about taxes - it's about building strong schools, well-maintained roads and transit, and cultural institutions like parks, theatres, and museums. Starving cities and counties will do none of that. Please, give the tax cutting nonsense a rest (at least on the state and local level).
  • Really?
    If the State of Indiana can afford to loose this tax income, than it should pay the interest to the Feds that it owes on the money it borrowed for unemployment. Indiana's Dept of Workforce made it's own errors, paid people that shouldn't be paid, borrowed the money to pay such people, and says it can't afford the interest. Since Indiana isn't paying, that burden has been delivered to business owners; and it's painful to small business. How do I get in the unemployment business? Seems like an easy way to not need to succeed.
  • Did anything useful come out?
    Is Pence just banging his head against a wall to see if something would work? He doesn't have ideas, just repayment to his political supporters. Where is his PR person?........probably outsourced.

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  1. Great article and post scripts by Mike L (Great addition to IBJ BTW). Bobby's stubborn as a mule, and doubt if he ever comes back to IU. But the love he would receive would be enormous. Hope he shows some time, but not counting on it.

  2. When the Indiana GOP was going around the State selling the Voucher bill they were promising people that the vouchers would only be for public charter schools. They lied. As usual.

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  4. Jim, your "misleading" numbers comment is spot on. This is the spin these posers are putting on it. News flash, fans: these guys lie. They are not publicly traded so no one holds them accountable for anything they say. The TV numbers are so miniscule to begin with any "increase" produces double digit "growth" numbers. It's ridiculous to think that anything these guys have done has awakened the marketplace. What have they done? Consolidate the season so they run more races on consecutive weekends? And this creates "momentum." Is that the same momentum you enjoy when you don't race between August and March? Keep in mind that you are running teams who barely make ends meet ragged over the summer to accomplish this brilliant strategy of avoiding the NFL while you run your season finale at midnight on the East Coast. But I should not obfuscate my own point: any "ratings increase" is exactly what Jim points to - the increased availability of NBC Sports in households. Look fans, I love the sport to but these posers are running it off a cliff. Miles wants to declare victory and then run for Mayor. I could go on and on but bottom line for God's sake don't believe a word they say. Note to Anthony - try doing just a little research instead of reporting what these pretenders say and then offering an "opinion" no more informed than the average fan.

  5. If he's finally planning to do the right thing and resign, why not do it before the election? Waiting until after means what - s special election at tax payer expense? Appointment (by whom?) thus robbing the voters of their chance to choose? Does he accrue some additional financial advantage to waiting, like extra pension payments? What's in it for him? That's the question that needs to be asked.

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