BRIAN HOWEY: Pence knee deep in taxes, repeals and mud

2014-02-16T00:00:00Z BRIAN HOWEY: Pence knee deep in taxes, repeals and mudBy Brian Howey nwitimes.com
February 16, 2014 12:00 am  • 

If you want to go to one of the most conservative places in Indiana where Hoosier Republicanism runs deep, I would recommend Wakarusa.

It's a lovely little town on Ind. 19 between Elkhart and Nappanee. It's a place where you can buy great Amish-made furniture, an RV or an apple pie. They have a wonderful maple syrup festival with amazing pancakes. The folks there are friendly and compassionate.

It was a place where Elkhart County Republicans would gather at Nelson's Golden Glo Port-a-Pit Hall for the annual Lincoln Day Dinner. One year I showed up as a reporter for the Elkhart Truth and Republican Vice Chairwoman Eloyse Forbes felt I looked too skinny (not a concern these days) and insisted I have dinner at the head table, much to the surprise of Gov. Bob Orr.

On another occasion, Tennessee U.S. Sen. Howard Baker, who was a White House aspirant, was the keynoter and didn't have time to finish his delicious plate of Nelson's Golden Glo Port-a-Pit chicken, so owner Nelson Gongwer traded his plate, then froze the original dinner. He would show it off to those interested in viewing a presidential campaign diet.

So, yes, this is a bastion of conservatism no one should doubt.

Thus, it caught my attention when on Feb. 4 the Wakarsua Town Board passed a resolution on Gov. Mike Pence's personal property tax repeal.

“None of the proposals being considered by the Governor or Indiana General Assembly contemplate any replacement revenues for those revenues they are eliminating via the full or partial elimination of the business personal property tax,” it stated. It further resolved, “that we oppose any proposal to eliminate all or any portion of the business personal property tax without a corresponding replacement revenue stream implemented by the state of Indiana.”

Why would the good leader folk of Wakarsua make such a statement? Because under this repeal, the town stands to lose $132,332, while Elkhart County would lose $60.9 million, or 27.5 percent of its property tax revenue.

What is fascinating is that in Republican strongholds across the state, similar resolutions are passing on city councils at Peru, Portland, Munster, Warsaw, Fairmount, Noblesville, Garrett, Linton, Plainfield, Lebanon and Monticello. County councils have passed resolutions against the repeal in Wabash, Morgan and Hendricks counties. In Noble County, municipalities and county government fashioned a joint resolution against the repeal.

This winter of discontent is festering in the heart of the Hoosier Republican base.

Scanning through the 2012 election results, Gov. Pence – who won the election with just 49 percent of the vote with a 2.3 percent margin – carried Elkhart County with 57.9 percent of the vote, Hendricks with 61.2 percent, Morgan with 60.8 percent and Wabash with 60.4 percent. He won Vanderburgh County with 51.2 percent. In Miami County, Pence won with 54.5 percent.

It was the big city Republican mayors Greg Ballard in Indianapolis and Lloyd Winnecke, of Evansville, who generated headlines by pushing back at the GOP governor over the proposal in Senate Bill 1 that would repeal the business property taxes for companies with $25,000 or less in equipment. That price tag comes to $54 million, and that is too much for cities and towns that have already seen massive budget cuts due to the constitutional property tax caps most of y'all passed in the November 2008 election.

All tax cuts are good, right?

I guess, but now you're finding you can't afford to bus the kids to school, keep the parks maintained, and replace aging squad cars and fire trucks.

Last Tuesday, Pence announced that he will seek full replacement revenue for local governments from the state after meeting with mayors. “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," Pence said.

Where does the replacement revenue come from? No one knows.

But that seemed to cover just SB1. It doesn’t cover House Bill 1001, which Pence supports and calls for local option income taxes to make up the replacement. The governor does not support replacing that revenue for local governments because it would be “optional,” Pence spokeswoman Christy Denault told the IndyStar.

"Optional" as in "county option income tax." That means the corporations get a tax cut, and the replacement revenue comes out of your paycheck.

Could I find a cooler Republican head?

That would be Senate Appropriations Chairman Luke Kenley, R-Noblesville, who reacted to the Pence replacement scheme by agreeing with me that perhaps it's time to step back and take a comprehensive review of all the tax reform, shifting and repeals we've had since 2008. SB1 calls for a blue ribbon study of the business tax repeal.

“I think he puts one of the difficulties on the table,” Kenley said of Pence’s move. “There’s been a revolution within an evolution as we’ve changed our tax system. The overall system needs a good, thorough review.”

In taking a step back and a time out, Sen. Kenley may be saving his Republican governor the unique Wakarusa experience. I'm not talking about a chicken dinner or a plate of pancakes with homemade syrup, though.

In the native Potawatomi tongue, Wakarusa means "knee deep in mud."

Brian Howey is publisher of Howey Politics Indiana. Follow him on Twitter @hwypol. The opinions are the writer's.

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