RICH JAMES: GOP smart to rein in Pence's tax plan

2014-01-12T00:00:00Z RICH JAMES: GOP smart to rein in Pence's tax planBy Rich James nwitimes.com
January 12, 2014 12:00 am  • 

Just four days into the 2014 legislative session and we already have three business personal property tax-cut proposals on the table.

So just who is in charge?

We know Mike Pence is the elected governor of Indiana.

But who really is leading the charge for Republicans, who can pass anything they so choose because they hold supermajorities in both the House and Senate?

With considerable fanfare, Pence a month or so ago said his legislative priority is the elimination of the business personal property tax.

Yep, eliminate the tax and find a way to make up for the annual loss of $1 billion in revenue.

Eliminating that tax would cost Lake County schools and local government units $74.2 million a year, Porter County $14 million annually and LaPorte County $7.2 million a year.

Pence didn’t say how the state should make up the loss, but he didn’t rule out shifting the burden to local individual income taxes.

He said he would leave it up to the Legislature to figure it out.

Enter House Speaker Brian Bosma, who took a look at the governor’s proposal and promptly discarded it.

Instead, Bosma and the House GOP proposed allowing each county to eliminate the tax — but only on new businesses and manufacturing equipment.

House Minority Leader Scott Pelath, D-Michigan City, praised Bosma, adding that his proposal essentially is tax abatement, something counties can do now.

So Pence’s priority for the 2014 session was pretty much wiped from the board. And a Pence spokeswoman said the governor supports Bosma’s proposal. Go figure.

Not to be outdone, Senate budget leaders Brandt Hershman, R-Buck Creek, and Luke Kenley, R-Noblesville, came up with their own business tax plan. And it too had no resemblance to Pence’s proposal.

The Senate version cuts the income tax rate on businesses from 7.5 percent to 6.5 percent this year and to 4.9 percent by 2019. It would cost the state $132 million in revenue.

The Senate bill also would eliminate the business personal property tax on companies with less than $25,000 in taxable property at a cost of $30 million a year to the state.

Senate Democratic Leader Tim Lanane, of Anderson, said it was nice that Republicans threw Pence a bone. But Lanane added it would be better to invest in the health and education of Hoosiers instead of more tax breaks for businesses.

Therein lies the party differences.

Republicans are committed to the businesses that fund their campaigns.

Democrats look out for the unions and middle class that provide them with financial support.

Yet there can be a common ground.

Pence’s plan is beyond irresponsible.

It is encouraging to see fellow Republicans rein him in. It must be an election year.

Rich James has been writing about state and local government and politics for more than 30 years. Email him at rjames@219.com. The opinions are the writer’s.

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