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Governor Mike Pence met with a group of Indiana mayors Tuesday to discuss the debate over phasing out a tax on business machinery – a tax that brings in millions of dollars in tax revenue for local towns and cities.

For the first time, Pence said he was “open to” the idea of giving state money back to towns and cities, in the form of a full revenue replacement, so they don’t lose millions if lawmakers do start to phase out that tax.

“The fact is some of the really small communities in our state may not be able to survive without this revenue,” Mayor Dick Hickman, D-Angola, who led a gathering of Indiana mayors at a Tuesday news conference, before their meeting with Gov. Pence.

“If this comes into play without replacement revenue, this is going to devastate cities on so many levels,” said Mayor Greg Ballard, R-Indianapolis. “I ask everyone at the Statehouse to think through the implications of their actions.”

For Indianapolis, the tax brings in some $25.6 million ($13.8 million for IPS, and more than $7 million for police and fire).

The city of Kokomo and Howard County could also be hit hard, with more than $23 million on the line, in a city where they’ve already been through a lot lately.

“We can handle floods, we can handle tornadoes, we can handle the snow and sub-zero temperatures,” said Mayor Greg Goodnight, D-Kokomo. “(But) I don’t know if we can handle some of the poor decisions that are being contemplated here at the Statehouse.”

“We’re more than halfway thru the session (and) we’ve not heard specifics, that’s why we’re nervous,” said Mayor Lloyd Winnecke, R-Evansville.

“I think it’s time for the House and Senate and governor to get on the same page and show some leadership and put some specifics behind the reassurances,” said Mayor Pete Buttigieg, D-South Bend.

“Tax reform will encourage an environment that will increase investment and  increase good paying jobs,” said Gov. Pence, who provided more reassurances to Indiana’s mayors in a written statement after their meeting Tuesday afternoon:

“I believe that reform of the business personal property tax will mean jobs for Hoosiers. 

“After listening to local communities across our state, I have informed legislative leaders that I am open to full state replacement revenue for local governments to cover the cost of eliminating the business personal property tax on small businesses with less than $25,000 in equipment, as proposed in Senate Bill 1. This would ensure that any reform of this tax does not unduly burden local governments or shift the cost of this tax onto hardworking Hoosiers.

“This reform, along with affording counties the option of ending the tax on new equipment as proposed in House Bill 1001, would make our communities and our state more attractive for the kind of investment that will create jobs for Hoosiers. In the end, Hoosiers and our local communities will benefit as business grow and companies bring new jobs to our state.

“I look forward to working together House and Senate leaders, as well as local officials, as we continue to advance these important reforms.”