Eliminating Business Property Tax Could Cost County $10.8M
Posted
Jordan Fouts-
State Gov. Mike Pence’s proposed elimination of the business personal property tax may not have much effect on attracting business to the area, but it would cost Kosciusko County about $10.8 million a year, county council heard Thursday. Council President Bob Sanders questioned during the meeting if the proposal is really a tool to help Indiana compete with neighboring states for business prospects, compared to how much the revenue means locally. The $10.8 million estimate came from a calculation by Kristy Mayer, county personal property supervisor, who said this morning she came to the preliminary figure based on an average tax rate without adjustments such as tax abatements. Most companies only look at total taxation, responded Kosciusko Economic Development Corp. President George Robertson, who attended Thursday to talk about areas of focus for attracting business in 2014. He said companies weigh taxation against a region having adequate taxpayer-funded services, such as schools and police protection, and noted Indiana already has among the lowest overall tax rates in the country. “We don’t feel like we’re losing companies. We do have the highest personal property tax on companies, the governor’s right about that,” but he doesn’t see it causing prospects to be lost, Robertson said. He also noted that the Indiana Economic Development Corp. has taken the position that it is opposed to the property tax elimination without a dedicated replacement to continue providing revenue to small towns. The personal property tax is really only an issue to businesses with a lot of high-value equipment at their location, such as data centers, he added. He said in that case he could see making an exemption from the tax. Robertson also told the council that real estate, infrastructure and workforce will be KEDCo’s top priorities in 2014. He provided a recap of 2013 – a good year for the county economic development-wise, he said – and talked about what needs must be addressed in order to continue to attract business and encourage existing companies to expand. He characterized 2013 as a year of mergers and acquisitions, with companies absorbing others in five places in the county, and said he expects this year to see more of the same. Last year also saw much of the county’s vacant real estate filled, he said, meaning the county must look next at fostering the construction of ready-to-use shell buildings. “Eighty percent of all the state’s prospects want existing buildings,” he told the council. “The thing about prospects is that few American companies are building new.” KEDCo started last year addressing the need for shell buildings, he added, which can be marketed to business prospects the minute construction begins. Pierceton is close to getting one such building, he said. Alongside shell buildings comes the focus on infrastructure, Robertson continued, a broad area including highway development, municipal utilities and prospects such as passenger rail and air taxi service. He detailed highway changes and developments that might benefit the county, such as a connection between U.S. 30 and the proposed Illiana Expressway, and returning U.S. 30 to limited access as much as possible – at least one major company has said it would not locate on the highway until the stoplights were thinned out, he noted. Regarding workforce, Robertson said prospective companies are beginning to ask about a region’s “pipeline” for creating tomorrow’s workforce in addition to asking about the existing workforce. To address the need for workforce development, he said KEDCo is planning to help launch in spring an eight-week “boot camp” program. Area manufacturing companies will write the curriculum in order to determine what they want in prospective workers. Also during the meeting, council discussed whether it would be appropriate for the county Convention and Visitors Bureau to provide $5,000 toward an environmental impact study for the proposed passenger rail service across the north of the state. Members debated whether that use of the money fits the intention for visitors bureau funds, and said they would have an answer next week, And in election of 2014 council officers, Sanders was re-elected as council president and Larry Teghtmeyer was named vice president.
