Gov. Mike Pence made waves earlier this year when he announced that part of his legislative agenda would be to eliminate the business personal property tax to make Indiana more attractive to companies seeking to locate here.
Increasing jobs was the goal, but cash-strapped municipal governments saw it as a threat because the plan offered no replacement for lost revenue.
The Associated Press reports that analysts for the nonpartisan Legislative Services Agency predict that property taxes on homeowners could rise and locally-based income taxes could increase by nearly one percentage point.
The Hamilton County Auditor’s Office estimates that Hamilton County overall could have about $20 million less revenue if the tax were eliminated. It also projects that the City of Carmel would lose about $2.6 million and Carmel schools would lose $3.4 million in revenue per year.
But now that the proposal has moved through the House of Representatives, it has been significantly amended.
The current version of the bill would simply allow that “a county income tax council may now adopt an ordinance to exempt from property taxation any new business personal property (other than utility personal property) that is located in the county.”
It would also allow governments to establish an enhanced abatement schedule for personal property that would extend 25 years instead of the current 10 years.
And while the method of the tax cut keeps changing, the threat is still real. And one entity that could also feel the effect is the Carmel Clay Public Library.
Library Director Wendy Phillips said the county auditor estimates that if the tax were eliminated, the library could lose about $400,000 in funding out of its current $6.3 million budget; about 6 percent.
“That would be a significant amount to us,” she said. “It would directly impact the resources that are available to the public.”
The greatest effect might be a scuttling of plans to increase library services in West Carmel.
While another library was never part of the strategic plan, extended children’s services at third party locations was an idea as well as a possible mobile library in 2015.
But right now, all library leaders can do is watch and wait.