RICH JAMES: Pence faces revenue shortfall, wants to lose more

2013-12-11T00:00:00Z RICH JAMES: Pence faces revenue shortfall, wants to lose moreBy Rich James nwitimes.com
December 11, 2013 12:00 am  • 

There is something wrong with this picture. Drastically wrong.

Gov. Mike Pence this week ordered state agencies to withhold $51.5 million in planned spending because state revenue for November was $76.8 million, or 7.8 percent short of the revenue target.

He put a hold on another $50 million in early 2013.

Pence said the cuts are necessary if the state is to maintain its $2 billion surplus.

I’m not sure why the state needs a $2 billion surplus, but so be it. It’s a nice round number.

What’s harder to understand is that Pence has made elimination of the business personal property tax his 2014 legislative priority.

On one hand, Pence is fighting to keep the state’s $2 billion surplus, and on the other hand, he is proposing a cut of $1.04 billion in revenue by eliminating the business personal property tax.

If that doesn’t bother you, consider that $109 million – or about 10 percent – of the business tax collected by the state comes from Lake County. And $25 million is collected in Porter County.

With the elimination of the tax, schools and local government here are going to get whacked.

Pence said he wants to cut the tax so it doesn’t “unduly” harm local government. And just what does unduly mean to you, governor?

Here’s the real kicker. House Speaker Brian Bosma provided the details Pence failed to mention.

Bosma said they may allow local government to decide whether to eliminate the business tax. Where was that mindset when Lake County was punished for not adopting an income tax?

What Pence and Bosma are saying is that Indiana is leaning toward pitting one county against another. Isn’t that akin to taking state’s rights to the point of absurdity?

Isn’t that kind of like grading all public schools based on the same criteria without consideration of the socioeconomic background of the students?

But I digress.

The elimination of the tax will cause Lake County schools to lose $37 million and Porter County schools $10.5 million annually.

It also would mean a loss of an additional $71 million for all other taxing units in Lake County and a shortfall of $15 million for other Porter County taxing districts.

Pence said the tax cut is to make Indiana’s already top-rated business tax climate even better. He failed to say the average Joe will make up the loss.

If that tax climate is so great, why are revenues falling short of target and the per capita income of Hoosiers lower than 40 other states?

This simply is another way of sugar-coating President Reagan’s failed trickle-down economics that Republicans continue to embrace. Saying something might trickle down to the guy at the bottom is like offering him the dregs of the coffee pot. It’s insulting.

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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