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Monday, February 10, 2014

Pence stays mum about property tax plan details

Posted By on Mon, Feb 10, 2014 at 4:00 AM

click to enlarge Lesley_Stedman_Weidenbener_-_mug_-_The_Statehouse_File.jpg
Republican Gov. Mike Pence is negotiating with lawmakers over legislation that could impact tax bills and the services received from local governments - but he wants to keep those talks behind closed doors.

Halfway through the legislative session, he's still refusing to talk details about plans to cut taxes for businesses - a move that could shift costs to individuals.

"I don't want to negotiate this in public," Pence said during a group interview with Statehouse reporters.

Pence has proposed eliminating the property tax on business equipment and supplies, which generates more than $1 billion for cities, counties, schools, libraries and other local governments.

He's got no plan - at least none he'll talk about publicly - for replacing that revenue or shifting functions away from local governments. Pence has said repeatedly that he doesn't want to unduly burden local governments, although it's not clear what that means.

And the governor has no answer - at least not one he'd talk about this week - for issues raised in a new report that finds eliminating the personal property tax would have only a small effect on businesses relocating to Indiana.

The report - from the Indiana Fiscal Policy Institute - also said an elimination of the tax would have a big impact on local governments still struggling to adapt to early property tax changes that stripped them of revenue. And it even said there is "scant empirical evidence" that eliminating the tax would directly lead to economic growth.

"Well, let me say, I haven't read the report yet. So I'm not in a position to respond to that in an informed way," Pence told reporters, shortly after touting it as "noteworthy" and "very thoughtful" and encouraging others to check it out.

Instead, Pence said the report highlights the importance of the tax in regional economic development.

So far, lawmakers have balked at Pence's proposal to totally eliminate the business personal property tax. Instead, the House and Senate have pushed separate plans to cut the tax or eliminate it for some businesses.

House Bill 1001 would give counties the authority to decide if new businesses have to pay the tax on new equipment purchased.

Senate Bill 1, meanwhile, would eliminate the personal property tax for businesses that own less than $25,000 in business equipment and office supplies. It would also reduce the corporate income tax rate to 4.9 percent.

Both bills fall far short of an elimination of the business personal property tax, but it's clear some legislators see that as an ultimate goal. But unless that's accompanied by other changes, eliminating the tax would shift the tax burden to individuals and strip local governments of significant revenue.

Pence has endorsed both plans. But he says they could be improved. How? He won't say. And he even teased a reporter for trying to get him to answer:

"That's another way to ask the same question. Isn't it?" he told WIBC's Eric Berman. "I appreciate that. Nice try."

Instead, Pence said discussions with legislative leaders are ongoing.

"Now I know you all want me to talk about detail," Pence said. "But you know we're involved in discussion and negotiations."

The public may have to get the information from lawmakers. It seems the governor just isn't talking - at least not about the details.

Lesley Weidenbener is executive editor at TheStatehouseFile.com, a news website powered by Franklin College journalism students.

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