Fort Wayne City Council rejects plan to end tax on new business equipment

Taxes on new equipment at General Motors and other county businesses would have been eliminated under a proposal rejected Tuesday by City Council. ( file photo)

City Council has rejected a proposal to eliminate the tax on new business equipment. Again.

Two years after defeating a similar ordinance from Jason Arp, R-4th, council did so again Tuesday by a 6-3 vote after the bill was opposed by government officials who said they could not afford to lose the $51 million generated by the business personal property tax every year. That total includes about $17.7 million going to the city of Fort Wayne, $11.5 million to the Fort Wayne Community Schools and $10.3 to Allen County government, with lower amounts going to other schools and jurisdictions.

Some opponents also feared passage of the bill could result in higher taxes on homeowners and fewer services, which could make the area less attractive to prospective employers and residents.

Those arguments persuaded council to defeat the proposal in 2016 but Arp reintroduced the bill earlier this year, believing an across-the-board elimination of the tax is preferable to the temporary elimination of the tax granted by City Council and others in exchange for investment and job creation. Such abatements, Arp believes, amount to the government “picking winners and losers.”

Arp, who has said revenue from the tax could be offset by economic growth sparked by its repeal, withdrew the bill from consideration in June to give the state time to review it prior to Tuesday’s vote. The repeal would have affected only new equipment; taxes on existing equipment would have continued, resulting in a gradual phase-in of its impact.