Personal Property Tax Elimination Proposal Could Cost Warsaw $2.2 Million In Lost Revenue
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Jennifer Peryam-jperyam@timesuniononline.com
Warsaw City Council heard Tuesday that Gov. Mike Pence’s proposal to eliminate business personal property taxes could cost the city $2.2 million in lost revenue. Warsaw Mayor Joe Thallemer made the announcement during the meeting and gave a presentation on the tax. Thallemer attended an Indiana Association of Cities and Towns meeting Jan. 17 in Indianapolis with other mayors from the state to discuss the impact eliminating the tax would have on their communities. During Tuesday night’s council meeting, Thallemer said the $2.2 million lost revenue is 11 percent of the city’s general fund. The council agreed to put together a resolution voicing opposition to the tax elimination and submitting it to local state representatives. Thallemer encouraged council members to contact their legislators regarding the issue. The council will vote on the resolution at its Feb. 3 meeting. “We are opposed to the elimination of personal property tax in part or in its entirety over time or immediately without guaranteed, complete income replacement,” Thallemer said. He said there could be a .77 percent increase in payroll taxes for Kosciusko County if the tax is eliminated and approximately $775,000 could be shifted directly to real estate property taxpayers, both residential and commercial. Thallemer said 23 percent of the current assessed value is attributed to personal property taxes and assessed value will go down and tax rates could go up. Another drawback is the loss of local economic development tools. Currently abatements give Warsaw Redevelopment Commission the flexibility to phase in or eliminate personal property taxes on a case by case basis. “Elimination of personal property tax eliminates an already limited local economic development tool box of yet another incentive,” Thallemer said. Thallemer said it will be a hinderance to the business climate to eliminate the tax. “It’s been a tool for our community to use the personal property tax, abatements and TIF bonds as incentives,” Thallemer said. Craig Hintz, Warsaw Community Schools superintendent, attended Tuesday’s council meeting and said the elimination of the tax will impact the corporation’s tax-supported funds and capital projects and transportation funds. Ann Zydek, Warsaw Community Public Library director, said the library could lose 15 percent of its revenue stream if the tax is eliminated and said that would be a major cut. Diane Quance, council president, said the tax being eliminated could effect the city’s services and amenities. She said it is important for potential residents and those looking to build in the county to have access to well-maintained parks, structures and sidewalks and nice libraries and schools. Quance said those things can be eroded by not having the funds to take care of them. Cindy Dobbins, council member, agreed that if the elimination of the tax is approved, it would be difficult to provide the infrastructure to create a business climate.
