INDIANAPOLIS — Indiana Gov. Mike Penceindicated Tuesday he is “open” to the state replacing revenue to local governments if the General Assembly adopts a plan to exempt small businesses from a tax.
Pence released the statement following a meeting with Evansville Mayor Lloyd Winnecke and a handful of other mayors across the state.
The Senate’s proposal to handle a reduction in the business personal property tax would eliminate the tax for businesses with less than $25,000 in machinery and equipment – which is about 71 percent of businesses in the state.
“This would ensure that any reform of this tax does not unduly burden local governments or shift the cost of this tax onto hardworking Hoosiers,” Pence said in a statement.
An analysis of the Republican-backed Senate proposal shows a loss of up to $54.4 million in revenue, according to the nonpartisan Legislative Services Agency. A Pence spokeswoman confirmed Tuesday the governor is open to replacing up to that amount.
Winnecke said the mayors had a productive meeting with Pence, and that the governor being open to the state replacing the lost revenue means he is no longer opposed to the Senate plan. Winnecke said Pence did not share details on how the state would fund the cost of replacing the revenue.
“His willingness to being open to full state replacement relative to (the Senate bill) is great news for communities all across Indiana,” Winnecke said.
However, Winnecke said he still has “grave concerns” over the House’s proposal which would give local counties the option to exempt the tax businesses pay on machinery and equipment.
In addressing the Senate’s plan, Pence also reiterated his support for the House’s proposal, which would give local counties the option to eliminate the tax.
In speaking with reporters last week, Pence declined to share details on ongoing negotiations between his administration and lawmakers over the tax reduction.