INDIANAPOLIS (AP) -
Gov. Mike Pence told several Indiana mayors on Tuesday that he would
consider using state dollars to offset any money they lose through a
proposed cut in the state’s tax on business equipment.
assurances that he would be “open” to sending state aid back to local
government came as he continued trying to find a way to quietly navigate
some level of business tax cuts through the General Assembly this session.
Pence did not say where he would find the money if he approves the
“replacement revenue” for local government.
Pence has made
cutting the state’s tax on business equipment a priority this year, but he
has left it to lawmakers to figure out details.
want to cut the tax for small businesses with $25,000 or less worth of
equipment, and cut the state’s corporate income tax from 6.5 percent to 4.9
percent. But House Republicans want to let counties decide whether the tax
will be eliminated on new equipment purchases.
“After listening to
local communities across our state, I have informed legislative leaders that
I am open to full state replacement revenue for local governments to cover
the cost of eliminating the business personal property tax on small
businesses with less than $25,000 in equipment, as proposed in Senate Bill
1,” Pence said in a statement released Tuesday. “This would ensure that any
reform of this tax does not unduly burden local governments or shift the
cost of this tax onto hardworking Hoosiers.”
But the governor
also said he continues to support the House plan.
Replacing the tax
money lost through the Senate bill, without pushing the burden onto
taxpayers at all, would require roughly $54 million in state dollars.
announcement came after an hour-long meeting with a group of mayors at his
Statehouse office Tuesday afternoon.
Lloyd Winnecke said they were happy with the governor’s decision to support
replacement revenue for any local cuts.
“We do still have
grave concerns about House Bill 1001 and expressed those to the governor,
but certainly his to being open to full state replacement relative to Senate
Bill 1 is great news for communities all across Indiana,” said Winnecke, a
concerns beyond the cuts to local government have arisen about cutting taxes
statewide. Tax collections have waned in recent months and a dour economic
forecast spurred Pence to cut agency budgets and higher education spending
this past December as well as sell the state plane.
And a report
released last week by the Indiana Fiscal Policy Institute, which tracks and
analyzes state budget decisions, threw into question Pence’s claims that
cutting the business tax would attract new businesses to the state or create
The House and
Senate plans are still winding their way through the General Assembly, which
is scheduled to end work during its 2014 session on March 15.