EVANSVILLE — A piece of legislation under consideration by the Indiana Legislature has Evansville officials concerned about future revenue.
Evansville City Council members voted unanimously Monday in favor of a resolution opposing the passage of House Bill 1002, which would lower the taxes businesses pay on equipment. The bill also proposes an income tax reduction from 3.23% to 3% by 2026 for all residents, and eliminates a 1.4% utility receipts tax.
But that tax cut would also mean a reduction in revenue for schools, counties and cities.
Justin Elpers, R-Fifth Ward, who sponsored the resolution, called the bill "a cause for concern."
“If that hurts our revenues, then we’re trying to provide essential services — whether it be improving infrastructure, paying off bonds, providing for our police and fire,” he said.
Zac Heronemus D-Third Ward; Alex Burton D-Fourth Ward; Ben Trockman D-First Ward; and Missy Mosby D-Second Ward, all joined as sponsors on the resolution.
All nine council members also signed a letter to state legislators Vaneta Becker, Ryan Hatfield, Wendy McNamara, Jim Tomes and bill co-author Tim O'Brien, asking that they vote against legislation eliminating any portion of the personal property tax without first finding a way to guarantee revenue replacement.
"Any contemplated revenue replacement must be a source of revenue that continues to grow over time," the letter states, "just as a property tax base would to allow growing communities to meet the demand for services."
Hatfield and O'Brien have already voted in favor of moving the bill forward to the Senate. McNamara was absent at the time of the vote.
Following the House vote, O'Brien said in a news release that Indiana's budget reserves have created an opportunity to cut state taxes.
"We are taking in more revenue than we need to effectively operate state government," he stated. "... It's only right to put more money in the pockets of hardworking Hoosiers."
According to city officials, business personal property taxes distributions to Evansville in 2021 was $24,371,941. The IndyStar reported local governments and schools could lose out on $103.6 million, due to property tax caps in 2037.
Heronemus said setting a city budget is already difficult. A drop in revenue would be detrimental to the city and its residents, he said.
“I personally am dumbfounded at this effort by the general assembly to really significantly impact local governments," Heronemus said.