Business and Economics

Local Officials Critical Of Business Tax Cut Proposal

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January 15, 2014 —

INDIANAPOLIS – The mayor of South Bend told lawmakers Tuesday that a bill to let local officials cut taxes for businesses would pit counties against one another in the race for jobs.

Mayor Pete Buttigieg said officials in his area have been embracing regionalism but the bill does not.

“We’ve come so far in economic development in Indiana, and this is no time to move backward in our strategy by pitting communities against each other,” Buttigieg said.

“Places like South Bend can’t prosper by scheming for a bargain. Racing the economy, racing to see who is going to be the cheapest, even if it means cutting schools, cutting libraries, cutting roads, cutting parks, cutting police,” he said. “If our neighbors are doing it, we are going to be forced to do it too, and then everybody will be worse off.”

The mayor’s comments came during a hearing Tuesday about House Bill 1001, which gives counties the option of eliminating the personal property tax, which is levied on business equipment.

About 20 people testified for and against the legislation, which is a top propriety for Republicans who control the Indiana House. Supporters said eliminating or cutting the tax would spur job growth and give Indiana an economic advantage.

The bill’s author, Rep. Eric Turner, R-Cicero, said the option would be available for counties that want more jobs and an economic advantage.

But local officials are unsure. The tax generates $1 billion in revenue for local governments, libraries and schools.

“We are alarmed about the possible causes of this bill before any bill that would cut personal property tax across Indiana, without guarantee of replacement revenue,” Buttigieg said.

Terre Haute Mayor Duke Bennett also expressed concerns about putting the burden on the local government to raise their constituents’ taxes as a solution to changes.

“I think raising income tax or anything else is not a wise decision,” Bennett said. “I know this is a difficult thing and an idea for making Indiana more feasible for people to have to do business in, but not at the expense of the local government.”


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