— The Indiana Senate has approved a measure cutting the state's business
equipment and corporate income taxes, a move that has some local leaders
The Senate plan
would cut the personal property tax for companies — about 70 percent
across the state — that have less than $25,000 worth of business equipment
and cut the corporate income tax from 6.5 percent to 4.9 percent.
Lawmakers approved cutting the state's corporate income tax rate from 8.5
percent to 6.5 percent three years ago.
The Senate voted
35-11 Thursday along party lines to send the measure to the House.
argued the state's many tax cuts have led to a reduction in services and
aid and have contributed to an atmosphere of blindly giving business most
of what it seeks.
really figured out: 'Are we giving away too much for too little?'" said
Sen. Karen Tallian, D-Portage.
But supporters of
the tax package, developed at the recommendation of Gov. Mike Pence and
the state's largest business lobbyists, argued that the series of tax
changes and other measures — such as the right-to-work ban on mandatory
union fees approved in 2012 — made the state able to retain and attract
Mike Pence rolled out his legislative agenda last month with a call for
the elimination of the state's business personal property tax, which is
levied on business equipment and mostly affects large manufacturers.
Appropriations Chairman Luke Kenley, R-Noblesville, said that legislative
Republicans had worked out a compromise plan that benefits businesses
across the board.
believe that this (corporate income tax cut) is a much better tax cut to
deal with than the personal property tax cut," he said.
The vote came
shortly after a coalition of local government groups announced they would
seek state aid to fill budget holes that would be created by the cuts. The
group includes lobbyists representing the state's municipalities, county
governments, police chiefs, fire chiefs, school superintendents and
The group noted
that other states that had eliminated their business equipment taxes,
including Michigan, found ways to protect their localities from budget
The cuts could
cost local governments and school districts hundreds of millions of
dollars. Indiana Association of Cities and Towns Director Matthew Greller
said that property tax caps placed in the state constitution in 2008 and a
struggling economy have combined to stretch many local governments too
"I think we all
see this as the most significant piece of revenue loss coming down the
road that local governments have ever seen in the state of Indiana,"
Greller said Thursday.