Indiana Corporate Tax Abatements: Are Reforms Coming to Indiana?

We tend to be skeptical of the advice coming from academia who receives funding from the Koch family and who is whisked away to ALEC conferences to hob nob with the free market libertarians, but sometimes they offer clues about what is coming.

Here’s why.

If Governor Mike Pence follows in the footsteps of his predecessor, he will generally request a letter from academic circles to build support for his upcoming recommendations. It’s really a staged exchange whereby, a PhD offers some policy advice and then the governor appears as though he’s solving a state issue. As we all know, paid shills come in all shapes and sizes, especially ones with PhD behind their name.

Anyway, Pence has already been leaking our information that he wants to discuss cutting $1 billion in revenue from business personal property taxes to make us competitive with surrounding states. Those lost revenues will have to be picked up somewhere or local government entities like schools and towns and cities will get pummeled.

Pay attention…

The recommendation for Hoosier property tax abatements by Ball State’s Michael Hicks in the Gannett owned Pal-Item this week was:

“We find that local governments abated $50.78 billion in property value through the study period or about $8.5 billion per year.At a 3 percent property tax rate, that is about $253 million in property tax revenue per year or about $2.75 million per county per year (which should be considered an upper bound on the impacts). Moreover, the effectiveness of these incentives is very poor relative to the most successful state tax incentive…”

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