The Economic Development Coalition of Southwest Indiana is speaking out against legislation that would eliminate business personal property taxes. The organization says any proposal on the issue should identify a “workable replacement revenue stream” for local governments.
January 24, 2014
Evansville, Ind. — The Economic Development Coalition of Southwest Indiana, which serves as the regional economic development organization for Gibson, Posey, Vanderburgh and Warrick Counties, is opposed to any legislation eliminating personal property taxes that does not clearly identify a workable replacement revenue stream for local government. Current legislation proposed in the Indiana House of Representatives and the Indiana Senate does not accomplish this goal; and, potentially erodes cooperation among regional communities.
Proponents of eliminating the tax promote states such as Michigan or Iowa as examples of having either abolished or are in the process of abolishing the tax. Both Michigan and Iowa recognized the burden that would be placed on local government if the tax were to be simply eliminated and have crafted measured legislation that uses state revenue streams as a replacement, which has not been proposed in either the House or Senate versions of the bill.
States often complain about unfunded federal mandates and their effect on state government. Passing legislation that does not address a workable replacement revenue stream for local communities can be viewed in the same manner.
Much more work needs to be done to address an issue with such significant economic implications and we urge the Legislature not to take any action toward reducing or eliminating personal property taxes during the 2014 session. A more reasonable course of action would be to start with a blue ribbon committee, as proposed in the Senate version, and explore all the possibilities of revenue replacement while at the same time getting a clearer picture of the fiscal impact to local communities and understanding whether or not the tax is an actual barrier to future investment.
Source: Economic Development Coalition of Southwest Indiana