A tax discussion drew more than 400 residents to the Goshen Theater on Wednesday, according to the city. “If you would have told me that hundreds and hundreds of people would come out for a lecture on taxes . . . I would say, ‘Only in Goshen,’” said Mayor Gina Leichty.
Leichty and Elkhart County Council member Steven Clark shared their concerns about Indiana’s property and income tax reform, and they recommended changes. They took aim at the restructuring of the local income tax system and a dramatic increase in the value of equipment businesses can buy without having to pay personal property taxes on it.
Leichty said the city stands to lose about $14 million dollars, once all the changes take effect, and adopting a city income tax wouldn’t fix the problem entirely. “If we adopted the full amount every year, we would still be about $4 million short in revenue,” she said.
Going forward, they want to see state lawmakers go back to the old system of local income taxes, lift the cap on the growth of property tax levies, and reduce the business personal property tax exemption.
State lawmakers at Wednesday’s event said they’re working on bills to delay the income tax changes by another two years but not eliminate them. Additionally, fiscal leaders hope to ease a requirement that city councils vote every year on a local income tax and to protect residential taxpayers from the impact of the business tax breaks.
Still, State Rep. Joanna King (R-Middlebury) downplayed the current law’s impact on cities like Goshen. “Goshen will get an increase to what they had gotten, but they will get a decrease of the increase,” King said.
At the same time, Clark argued that Indiana already has one of the country’s best tax systems, citing an analysis from the nonprofit Tax Foundation. He felt that property tax reform was a political move.
“If you’re running for governor, you know what’s really popular? ‘I’m going to cut your taxes, and I won’t have to deal with the consequences of that,’” Clark said.
Clark said many Hoosiers probably pay more in sales tax, but it isn’t as noticeable, and the state would have to deal with the result, rather than local governments.
