Portage schools, city balk at business tax elimination proposal

2014-01-18T22:30:00Z 2014-09-18T20:43:08Z Portage schools, city balk at business tax elimination proposalJoyce Russell joyce.russell@nwi.com, (219) 762-1397, ext. 2222 nwitimes.com

PORTAGE | Both city and Portage Township Schools officials are sending a message to Gov. Mike Pence about his proposal to eliminate the business personal property tax.

It would be devastating, representatives from the groups said.

The Portage City Council passed a resolution asking the governor to change his mind.

"This City Council does a lot of stuff to help businesses already," Councilman Mark Oprisko said. He said he feels it is important Pence provides a plan that won't hurt cities, towns and school districts throughout the state.

The School Board discussed a similar resolution last week and will vote on it at a meeting Monday night.

Clerk-Treasurer Chris Stidham said if Pence's proposal is approved, it would mean a reduction of 19 percent of the city's annual property tax revenue or $2.6 million.

That, Stidham said, could force Portage to look at privatizing the trash pick-up and ambulance services to make up for the lost revenue.

The city's resolution also contends that the loss of services to residents and businesses could result in significantly reduced economic development that would continue a cycle of lost revenues and service reductions.

It asks for the proposal be reconsidered; that the state General Assembly reject Pence's proposal and, that if passed, it include a plan for replacement of those lost revenues from the taxpayers paying the personal property tax and not from residents.

For the school district, Superintendent E. Ric Frataccia said, it would mean a loss of $2.8 million in total revenue.

Frataccia told the School Board the district's capital project's fund, which has a frozen tax rate, would be reduced by $700,000 and could not be recouped.

"That's a lot of maintenance that won't get done or we will have to hit the rainy day fund," he said.

The district could make up the loss of the other $2.1 million, but would have to do so by raising tax rates and shifting the burden to residents, he said.

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