Goshen News, Goshen, IN

Local News

December 8, 2013

Bipartisan opposition locally to killing tax

GOSHEN — Eliminating the state’s business personal property tax is Gov. Mike Pence’s priority for the upcoming General Assembly session. But it’s an idea that is getting bipartisan rejection at the local level.

“From my perspective, this looks like a political move that will not create more jobs. I see zero benefit to this and think it is a bad idea,” said Republican Elkhart County Commissioner Mike Yoder.

Yoder, and other local officials, are worried that the $1 billion in statewide tax revenue from business personal property will not be replaced by the General Assembly. That would leave local governments in Elkhart County $7.5 million in the hole, as that is how much revenue is generated in the county. And, Yoder said the cut would come on top of the reduction in property tax revenue due to tax caps.

Another aspect of the elimination of the business personal property tax would be an across-the-board hike in property taxes in the county, according to Yoder. And ironically, Yoder said businesses not already at their tax cap limit would end up paying more on their property taxes.

“They will save money on the personal property tax, but they are going to pay more on their real estate tax,” Yoder said.

The business personal property tax is assessed on the value of equipment a business owns.

According to Purdue economist Larry DeBoer, who wrote a column about the issue this week, if the personal property tax is eliminated from the assessed value in a county, “total assessed value would be smaller. We calculate property tax rates by dividing the levy by assessed value. With the levy limited and assessed value smaller, most tax rates would go up. Personal property owners would pay less, but higher tax rates would shift the tax burden to everyone else.”

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