The Outstater: Clarity and the Local Economy

August 31, 2016

For the use of the membership only; not for publication, duplication or quotation (490 words).

by Craig Ladwig

Those Indiana communities that can discuss fiscal and economic matters in clear and honest terms, what attracts investment and what does not, will have an advantage. Fort Wayne, in the midst of a discussion whether to take the Legislature up on a new tax exemption, will not be among them.

An Aug. 25 editorial in the Fort Wayne Journal Gazette implied that a proposal exempting the tax on business personal property (machinery and equipment) would amount to an annual loss of $51 million in tax revenue:

“Introduced by City Council Tuesday, the proposal would (exempt) business personal property taxes charged on non-real-estate items owned by businesses. It last year amounted to just over $51 million in revenue countywide, according to Allen County Auditor Tera Klutz.”

The auditor, asked to verify that the $51 million as used in the editorial — that is, used as the projected annual loss due to the tax exemption — left the newspaper uncorrected. Indeed, she refined the figure — $51,080,443.39, to be exact. Unasked of the auditor, though, were questions that a newspaper might have thought of interest to the discerning taxpayer:

Considering the economic boon of exempting a tax on business equipment, which, of course, is used to create jobs for taxpaying workers, the finance expert for the Indiana Chamber of Commerce, Bill Waltz, added this:

“Local units will not see revenue decreases, but smaller revenue increases. And then there is the less measurable impact — the positive effects of enhanced economic activity, and more businesses making additional investments in their operations and employees.”

It is difficult to understand why a newspaper would defend a fanciful or at least arbitrary number. It leaves its readership in the sorry position of depending on the government, the county auditor, acting as a referee, to keep the facts straight in an important policy discussion, one that will be repeated throughout the state in coming months.

Craig Ladwig is editor of the quarterly Indiana Policy Review.


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