If you're worried about footing the bill for eliminating the personal property tax for businesses, your misery has company.
A new report by the Indiana Fiscal Policy Institute shows how much Lake County could be affected by this proposal.
Gov. Mike Pence has proposed eliminating this tax but left it up to the Indiana General Assembly to figure out the ramifications. And for Lake County, that impact could be huge.
Eliminating a tax is easy. Figuring out how to provide the services that tax previously funded isn't easy because it means figuring out who gets stuck with the tab.
Pence wants to eliminate the tax, but he also doesn't want it to be onerous for private citizens. I'm still trying to figure out how that could be accomplished.
As economists John Stafford and Larry DeBoer noted in the Indiana Fiscal Policy Institute report, personal property is mainly business equipment used to produce an income. For a steel mill or refinery, that's close to the entire value of the mill.
Further complicating all this is the constitutional cap on property taxes. If property tax rates rise in Lake County and elsewhere to help businesses reduce their tax burden, more homeowners and others would hit those tax caps. That would make it even harder for local government to recoup that lost revenue.
Further complicating the issue is that the personal property tax burden isn't spread evenly throughout the state.
Lake, Allen, Marion and Vanderburgh counties by themselves account for 29 percent of all Indiana revenues from this tax, the report explains.
Eliminate this tax, and those counties are hit hardest.
Lake County alone would lose an estimated $109 million a year (17.5 percent of county property tax revenue). Porter County would take a $25 million hit (13.4 percent).
The burden could be shifted onto a local option income tax, but that's onerous for private citizens. Businesses aren't subject to that tax.
Separate House and Senate proposals to abolish this tax are moving forward, but the solution for replacement revenue still isn't palatable.
A better solution might be to offer long-term abatement for new personal property. That would have the effect of encouraging additional investment even as the state acknowledges concerns expressed by businesses, especially manufacturers, about this tax.
It also would avoid the necessity of making Hoosiers pay for a major business tax break.
Indiana is already business-friendly. It doesn't need to become business-intimate at the citizens' expense.