INDIANAPOLIS | The Republican-controlled chambers of the Indiana General Assembly separately approved competing plans Thursday that both give big tax breaks to Hoosier companies.
Senate Bill 1, which passed on a 35-11 party-line vote and now goes to the House, reduces the 7 percent state corporate income tax rate to 6.5 percent next year and ultimately to 4.9 percent by 2019.
It also exempts companies with less than $25,000 in taxable business equipment from the state's personal property tax.
"This is a jobs issue," said state Sen. Brandt Hershman, R-Buck Creek, the sponsor. "This bill will help attract investment, support wage growth and help our state's marketing efforts."
When fully implemented, the corporate tax-rate reduction will shrink state revenue by $131 million a year.
Senate Democrats argued that years of repeated business tax cuts have created few good-paying jobs. Instead, they've all but destroyed the ability of the state and local governments to provide needed services to Hoosiers.
State Sen. Karen Tallian, D-Ogden Dunes, likened the Republicans' hunger for more tax cuts to pie eating. She said the first slice is delicious, but at a certain point, continuing to scarf it down has unfortunate consequences.
"We just stepped over the line," Tallian said. "We should be expanding services, doing Medicaid expansion, raising the minimum wage. We should not be doing another corporate tax cut."
The business personal property tax exemption will enable 71 percent of businesses to stop filing, with a net statewide impact of $25 million in lost revenue for local governments and schools -- which Hershman said most localities easily can afford.
"If the town of Ogden Dunes cannot contribute $908 to help the business environment of the state of Indiana, then shame on them," Hershman said.
Across the rotunda, the House voted 63-33 to send the Senate House Bill 1001, giving each county the option to eliminate its business personal property tax on new equipment.
The measure is a faint shadow of Republican Gov. Mike Pence's call for a complete statewide elimination of the tax.
State Rep. Eric Turner, R-Cicero, the sponsor, said Indiana must continue finding ways to reduce its business taxes to better compete with neighboring states.
Democrats blasted that idea, pointing out that a reduction in a county's business property taxes will force up residential property taxes and county income taxes.
"I have a feeling the new governor, on his first day in office, was cleaning out Mitch Daniels' desk, found Mitch's List of Bad Ideas, and this was the next one up," said state Rep. Ed Delaney, D-Indianapolis.