As Gov. Mike Pence puts it, his proposal to eliminate the business personal property tax is to “improve economic opportunities for Hoosiers.” But as Warsaw city leaders see it, it would mean higher taxes for homeowners and workers already hit hard by rising cost of living expenses.

If lawmakers move forward with the governor’s plan as introduced, the city of Warsaw would lose $2.2 million in revenue, or 11 percent of the General Fund. It is those monies that help fund public services like police and fire operations. Local schools would love approximately $1.3 million and the city library would have to cut $400,000.

“The biggest issue with the proposal is that there is no replacement plan,” said Thallemer. “What it would do is shift the burden to local workers … that’s the travesty of the whole thing.” (See related PowerPoint)

With his involvement in the Indiana Association of Cities and Towns, Thallemer has met with state officials and mayors from around the state. The common stance on the governor’s proposal is that it would have devastating effects on communities that rely on business taxes.

Among the incentives communities like Warsaw have in attracting new business is that they can currently offer tax abatements. “We need those incentives for new business, but with the governor’s proposal that will be a tool taken away. It puts locals at a disadvantage,” he said.

In sending the city’s disapproval of the proposed tax reform, the common council approved a resolution to send to Indianapolis noting they are “strongly against” eliminating the business property taxes. They agree that, without a state plan for communities to recoup those monies, public services will suffer, local road conditions could deteriorate, local parks would be neglected.

Gov. Pence’s reason on eliminating the personal property taxes paid by businesses is that, “Too often, we see companies choose one of our neighboring states over us. The business personal property tax has been a significant factor in many of these instances,” he said in a letter to Hoosier mayors. But councilman Charlie Smith, who also serves on the Warsaw Redevelopment Commission, said the governor has no facts to support what companies left or chose another state because of the tax.

A resolution agreed on by the council Monday night, in short, reads: “Now therefore be it resolved by the Common Council of the city of Warsaw that we stand firmly opposed to any attempts which would diminish the revenue collected from the Business Personal Property Tax. We urge our local legislators to vote against any attempt to repeal this tax.”

There are currently two bills being discussed this legislative session. House Bill 1001 would give the county income tax council the option of phasing out the business personal property tax on new investment. Senate Bill 1 would eliminate the tax on businesses with less than $25,000 in personal property assessed valuation.