FORT WAYNE, Ind. (21Alive) – Fort Wayne Mayor Tom Henry spent the day at the statehouse with other mayors Tuesday, arguing that removing a local business tax would mean the loss of a billion dollars in revenue to local governments across the state.
These are the personal property tax filings for businesses in Allen County listing items like machinery, furniture and copiers.
Senate Bill 1 is designed to stimulate economic development by eliminating that tax for three-quarters of these filers, since they have less than $25,000 in items to be taxed.
But doing that means Allen County would lose more than $4 million in tax revenue every year, money it desperately needs for running local government, the sheriff's department and jail, and the court system.
Since that revenue needs to come from somewhere, one million of it would automatically come from raising your "property" taxes to the max if you haven't already hit the property tax cap.
"You're either going to get pushed to the limit and then you'll see a circuit breaker credit on your tax bill, or you'll get pushed closer to the limit to see the increase. And we're estimating those increases on those homeowners or businesses that haven't hit the caps to be less than six percent," says Allen County Auditor Tera Klutz.
How to make up the other $3.3 million in lost revenue is not clear: perhaps raising the local option income tax or some other mechanism from the state.
"The governor said yesterday that he's willing to help replace that revenue. And if that's the case, we're certainly supportive of that. If the revenue is replaced, I think it could be a good thing for the taxpayers," says Allen County Assessor Stacey O’Day.
O'Day says Senate Bill 1 provides for a group to study the impact on local revenue and homeowners' property taxes.
But that report would be due in November, assuming the measure has already been passed.
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