News and Tribune

March 24, 2014

HAYDEN: Friend of Pence’s turned political foe


INDIANAPOLIS — In his years as a party activist, Rushville Mayor Mike Pavey raised money and votes for fellow Republican Mike Pence, a former congressman who now occupies the governor’s office.

Beyond sharing Pence’s pro-business, small-government ideology, the engineer-turned-mayor has long felt a special kinship with the man. It was in the small city of Rushville where Pence, having flamed out in a second run for Congress, launched his conservative talk radio show 22 years ago.

The talk show was soon syndicated statewide, and it revived the man who’d been left dead politically. Pence won on his third try for Congress, and he was re-elected five times. Rushville and the surrounding Rush County went for Pence in his narrow 2012 gubernatorial victory; he won by 10 points more there than he did statewide.

Despite their history, Pavey has spent the last three months working against Pence — specifically the governor’s top legislative priority for the 2014 session.

Along with Republican and Democratic mayors statewide, Pavey has pushed back hard against Pence’s proposal to eliminate a business tax that generates about $1 billion a year for schools, libraries and local governments.

Pence and his GOP legislative allies have said eliminating the tax — levied on machinery, equipment and other property — is a sure-fire job creator. But they’ve not come up with a plan to replace the lost revenue if that doesn’t come true.

Pavey, knowing a full repeal of the tax could mean about $1 million per year in lost revenue for Rushville, is worried. The property tax caps of 2008 reduced city revenue by more than 38 percent, causing serious cuts. Pavey had this description of the Pence plan for the business tax: “It felt like a professional hit. And it felt like a personal one, too.”

Pavey left his Rushville office several times during the session to lobby lawmakers to vote against two different tax rollback bills.

And he helped mobilize Rush County Republicans who control city and county government. The County Commission, County Council and City Council teamed up with the school board and local Chamber of Commerce to pass a joint resolution — mirroring those passed by Republicans across the state — that opposes any legislation to reduce or eliminate the business tax.

City Councilor Bob Bridges and County Commissioner Bruce Levi, both Republicans, called Pence’s proposal “devastating” for the community and its schools.

You’d think all those Rush County Republicans would have taken comfort in Pence’s oft-repeated words that he and the super-majority Republicans in the Legislature would protect communities from being “unduly harmed.” But his failure to define “undue harm,” along with the absence of a plan to replace revenue, spoke louder than his words.

In the end, Pence’s big plan fell short. The legislation that came out of the General Assembly in its waning hours is just a partial rollback. It gives counties the authority to begin reducing the tax in July 2015 and sets up a “blue ribbon” commission to study the tax and its impact.

But Pavey and his peers remain both vigilant and convinced of the eventual end of the business personal property tax  — with no replacement dollars from the state.

And that pains the mayor.

“I like the governor personally,” Pavey said. “It’s a very uncomfortable position to be put in, to have to say to him, ‘Slow down before you hurt this community.’”

— Maureen Hayden covers the Statehouse for the CNHI newspapers in Indiana. She can be reached at Follow her on Twitter @MaureenHayden