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Indiana

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Lawmakers’ plans vastly different

– The Indiana House and Senate on Thursday passed divergent approaches to curbing the business personal property tax.

Gov. Mike Pence initially pushed for a complete elimination or phase-out of the tax, but lawmakers have resisted, focusing on smaller cuts.

Indiana schools and local government rely on the tax on business equipment for about $1 billion in funding annually.

House Bill 1001 passed 63-33. It would allow local counties the option to permanently exempt new personal property tax. But it would not allow the exemption for a business that has simply moved from another Indiana county.

Rep. Ed Delaney, D-Indianapolis, called the bill a dangerous measure. He quoted a fiscal analysis that said the bill will cause a shift from businesses to all other taxpayers, including homeowners.

Rep. Eric Turner, R-Cicero, author of the bill, emphasized that the bill is a local option and counties don’t have to do it if they don’t want.

“I also have a hard time wrapping my arms around the fact that they don’t have this new capital investment now,” he said. “How can you miss something you don’t have?”

In the Senate, Senate Bill 1 passed 35-11. It would exempt small businesses with $25,000 or less in equipment from paying the personal property tax. It affects about 71 percent of filers but costs local units only about $30 million. An additional $20 million will be shifted to other taxpayers.

The legislation also further reduces Indiana’s corporate tax to 4.9 percent by 2019.

It has already been reduced from 8.5 percent and was set to go to 6.5 percent next year. Senate Bill 1 would drop it to 6.5 percent this year and to 4.9 percent in the future.

The revenue loss would be about $132 million annually to the state when fully implemented.

“Lowering the corporate tax is in the best interest of Hoosiers. Indiana still ranks in the middle of the pack nationally,” said Sen. Brandt Hershman, R-Buck Creek, author of the bill. “And workers receive lower salaries when corporate tax rates are higher.”

Sen. John Broden, D-South Bend, acknowledged the Senate bill is a more measured approach than Pence’s.

But he said local officials are worried about what will happen. He said state lawmakers will send out news releases about cutting taxes while leaving schools and cities and towns to deal with the ramifications.

No pension cut

The Indiana House voted unanimously Thursday on legislation that will curb a pension cut for soon-to-be retired teachers and public employees.

House Bill 1075 now moves to the Senate.

The Indiana Public Retirement System decided last year to privatize the annuity system used by members of the Public Employees’ Retirement Fund and Teachers’ Retirement Fund. Currently, retirees can receive monthly annuity payments from the retirement system calculated with an automatic 7.5 percent interest rate.

Under a third-party vendor, that rate will drop significantly costing beneficiaries tens of thousands of dollars.

The legislation would prohibit the pension board from privatizing the annuity program for five years. This would give older employees who had planned to retire soon the chance to do so without major changes.

Fair trumps school

The Indiana House voted unanimously Thursday to allow students – with parental approval – to miss five days of school to participate in the Indiana State Fair.

Under House Bill 1056, absences will be excused and a student can’t be penalized in any way.

Rep. Bob Cherry, R-Greenfield, said 16,000 4-H members participate at the fair annually with livestock projects and other programs. He said schools are starting earlier in August every year due to shifting to balanced calendars.

The bill now moves to the Senate for consideration.

Indiana grown

A bill to bolster a program trumpeting Indiana-grown foods passed the House 95-0 though it no longer has funding attached to the initiative.

“It’s time for Indiana to support the Indiana farmers,” said Rep. Matt Lehman, R-Berne.

House Bill 1039 would expand the Indiana Grown initiative, which started in 2012 but has had little participation.

Lehman hopes the state will use money for marketing, promotions and tourism for the state agricultural industry.

It originally involved a $5 million appropriation for the program, but fiscal leaders removed the money since a state budget is already in place.

The bill now moves to the Senate for consideration.

nkelly@jg.net

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