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Local government leaders are anxiously watching the Indiana Legislature as it tinkers with yet another form of taxation this session.
When word first started filtering out that eliminating a major source of income to cities and towns, the business personal property tax, was high on Gov. Mike Pence’s list, local government leaders became nervous. In a story published last Monday, we reported that the loss of revenue for Tell City alone could exceed $450,000.
Local leaders are keeping a close eye on what the Legislature will end up doing. As citizens and local leaders have come to know over the years, you never know what our 150 friends and neighbors might end up doing in Indianapolis between the day the session opens and when the final bell rings in its adjournment, in this year’s case, in March.
What local leaders fear — as should citizens and taxpayers — is the negative impact of the business personal property tax reduction. The fear is that whatever tax is allowed to make up the lost revenue will come at the expense of homeowners or wage earners.
One need only look back in Hoosier history some 12 years when the start of the phaseout of the inventory tax started. In a few short years, the much despised inventory tax was gone, as was its revenue to local units of government.
In order for government to make up that revenue, the Legislature gave counties the option of enacting what is commonly referred to as LOIT, which stands for Local Option Income Tax. County councils were given the option of enacting LOIT to pay for such things as public safety.
Of course, LOIT is paid by wage earners, not businesses.
Special legislation approved by the Legislature allowed Perry County to increase the amount local wage earners pay to fund the county’s new jail.
The thinking when the inventory tax was repealed was that this would be a boon to attracting new business. Unfortunately, the economic impact of attracting these companies has not brought up the income of Hoosiers enough and universally in order to offset the impact of LOIT.
Even local business groups have mixed feelings on the loss of business personal property tax income. At an adjoining chamber of commerce meeting, members were torn between opposing the bill due to the loss of revenue to provide public services and the desire to help lower the tax burden on businesses.
We need a fair balance of taxes in order to provide services enjoyed by not only residents of Indiana, but people doing business in Indiana.
Businesses should pay their fair share of doing business and a fair tax rate on business personal property is, in our opinion, not that onerous. If it is, legislators should look at lowering the amount of money family farmers pay on each acre of land.
There’s no easy answer. However, the Legislature needs to realize that the tax burden has shifted far enough to the wage earner and it must stop.
Our view: Editorials reflect the opinions of the newspaper. Portions of this one came from a Jan. 28 editorial published by KPC News.
Your view: Tell us what you think. Send e-mail to us at editor@perry countynews.com or mail your comments to P.O. Box 309, Tell City, IN 47586.