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The Journal Gazette

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Wednesday, August 29, 2018 1:00 am

Business property tax won't be dropped

City Council votes 6-3 against Arp's proposal

DAVE GONG | The Journal Gazette

For the second time in as many years, the Fort Wayne City Council on Tuesday rejected a proposal to eliminate Allen County's business personal property tax.

The proposal failed in a 6-3 vote. The council previously voted against the proposal in 2016.

It took about an hour for Councilman Jason Arp, who has been pushing to eliminate the tax since he was elected in 2015, to outline his proposal, which was co-sponsored by Councilman Paul Ensley, R-1st.

Arp, R-4th, contends that eliminating the tax, which is often abated by the council for individual businesses, would remove a tax burden from local businesses. Eliminating the tax would also create less work for the council members, who have to review noncompliant businesses every year.

Eligible businesses can apply for a 7- or 10-year tax abatement on business personal property. To maintain that abatement, which phases in taxes over a period of time, companies must meet stated payroll and hiring and retention goals each year.

“Our choice is relatively simple,” Arp said. “Do we continue the bureaucratic micromanaging of businesses and have business owners come and tell their story to us about why we should or should not allow them to have a different tax rate than other people in their industry, a different tax rate than their neighbors. Or we can create a competitive free market environment simply by voting aye.”

Arp was joined by Ensley and Councilman Russ Jehl, R-2nd, in support of the proposal. Councilmen Michael Barranda, R-at large; John Crawford, R-at large; Tom Didier, R-3rd; Tom Freistroffer, R-at large; Glynn Hines, D-6th; and Geoff Paddock, D-5th, voted against it.

Although Arp and Ensley said businesses have been calling out for business personal property taxes to be eliminated, only two people spoke in favor of the proposal at a series of public hearings last month. Taxing bodies that spoke out against the proposal included the Allen County Public Library, area school districts, the Fort Wayne-Allen County Airport Authority and Citilink.

Representatives of those entities foretold significant decreases in available revenue if the tax was eliminated. In particular, area schools indicated they would likely have to make further cuts to transportation budgets. Other officials opposed to the change have also said the tax burden would be shifted onto Allen County homeowners as taxing bodies struggle to make up for projected shortfalls.

“I think the assessed values will go up, as a result property taxes will go up, as a result your PITI will go up, which is your principal interest taxes and insurance,” said Freistroffer, who is a real estate agent. “People will be putting more money into their mortgages and less money, basically, into the economy.”

dgong@jg.net