Indiana Chamber of Commerce President and CEO Kevin Brinegar called the Indiana General Assembly’s action to reduce the business personal property tax “a positive move” for the state, but for communities like Warsaw, it is those taxes that largely support public services and schools.

The package approved by lawmakers allows for a 4.9 percent reduction of corporate income and state banking taxes over the next six years starting in 2015. It also includes an option for local governments to decide if they want to exempt some employers from the business personal property tax.

With the General Assembly agreeing to reduce those taxes and move forward with total elimination in the future, Warsaw Mayor Joe Thallemer said communities like Warsaw likely will have to pass the burden on to individual taxpayers; workers who are already hit hard by rising cost of living expenses.

Still, Thallemer told StaceyPageOnline.com, “I actually felt pretty good about this versus when it all first started. They are at least kicking the can a little to put anything off till 2015 so that it can be studied. I’ve always maintained why pass something and then study it, but I suppose it’s political … and to that end [the governor] got what he wanted.”

There are two local options in the bill. One is for local government to exempt newly acquired property outright or for small businesses, and the second is to offer a “super abatement,” which is an extended tax abatement from 10 to 20 years. “[It] will prove to be meaningful tools in attracting new business and jobs to the state,” according to Brinegar.

“Business personal property tax has been the one tax policy area in which we stand out negatively,” he added in a press release. “Some states don’t tax it at all, and Indiana’s rate is among the highest in the country.”

Thallemer said the package approved by the General Assembly will not initially impact Warsaw or Kosciusko County and calls for only “small provisions” to be implemented next year. “But, there are still concerns for county to county decisions and (local government) not being given a voice,” he explained. “It still pits county against county.”

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

The mayor added, “The one good thing that did come out of it is the establishment of the Blue Ribbon Commission. It will look at the whole policy and I have to assume we’ll have a seat at the table for that. That’s when the real decisions will be made by the state.”

Brinegar added, “Looking ahead, the Blue Ribbon Commission will be a vital player in how far this goes and how quickly. That group will examine how we can go from today’s legislation to total elimination down the road, while still ensuring that vital local government services are provided for.”

The plan to eliminate personal property taxes for businesses came from Gov. Mike Pence as a means to “improve economic opportunities for Hoosiers.” Under the governor’s initial proposal to simply eliminate the taxes altogether, for Warsaw that would have meant a loss of $2.2 million in revenue. Local schools would have stood to lose approximately $1.3 million and the city library would have had to cut $400,000 from its budget.

“The train has left the station; the tax will probably slow be phased out as it seems to the decision of the governor and the assembly,” said Thallemer.

Without a state plan for communities to recoup the monies now received from business taxes, public services will suffer, local road conditions could deteriorate, local parks would be neglected.