Pharos-Tribune

State News

April 4, 2013

Pence says Senate GOP plan for 3 percent tax cut not enough

INDIANAPOLIS — Gov. Mike Pence appears to be still dug in on his demand for a 10 percent income tax cut, despite a “nod” from Senate Republicans willing to give him a smaller slice of what he wants.

On Thursday, Republicans who control the Senate unveiled a $29.5 billion two-year budget plan that mirrors much of what House Republicans have already proposed: It adds more funding for roads and schools than what Pence proposed in his budget plan; but unlike the House bill, the Senate spending plan includes a 3 percent cut in the personal income tax rate.

Pence wants a permanent 10 percent cut, which would take about $750 million in revenues out of state coffers over the next two years and $500 million every year after that.

“That’s still my position,” the Republican governor told reporters at a press briefing after the Senate budget bill was released.

Repeating his frequently made argument that a 10 percent income cut would boost the state’s economy, Pence declined to answer a reporter’s question about whether he’d veto the final budget bill if it came to him without the tax cut he wants.

Pence said he’s still in negotiations with the legislators in his own party who’ve so far rejected his tax cut plan.

“I’m encouraged but not satisfied,” Pence said. “I look forward to a vigorous and respectful discussion in the weeks ahead.”

Time isn’t on his side: The final two-year budget plan has to be approved by both the Senate and House before the end of April — or the governor would have to call the Legislature back into a special session.

Republicans who control the House rejected Pence’s tax cut plan outright in their budget bill. GOP leaders in the House called it unsustainable and derided it as little more than a campaign promise made by Pence when he was running for governor last year.

Senate Republicans were a little more conciliatory. While they boosted funding for roads and schools beyond what Pence proposed in his budget plan, they also included a drop in the income tax rate from the current 3.4 percent to 3.3 percent.

Pence wants to lower Indiana’s 3.4 percent individual income tax rate to 3.06 percent.

“It is a nod to Gov. Pence, but also something we agreed with him on — that this does make sense,” Sen. David Long said of Pence’s call for reducing taxes.

The Senate budget bill speeds up the elimination of the inheritance tax, killing it retroactively to Jan. 1, 2013. The tax, which brings in about $150 million a year, is currently being phased out, to end in 2022.

The Senate budget bill also lowers a financial institutions tax, which would reduce revenues to state and local governments by about $36 million each year. It also continues to step down the corporate income tax rate to 6.5 percent from 8.5 percent.

Altogether, the Senate plan reduces tax revenues by about $500 million a year — about the same amount that the Pence tax cut plan would result in.  

Like the House-approved spending plan, the Senate budget bill includes $331 million in additional funds for elementary and high school education over the next two years. The Pence budget plan proposed only a $137 million increase for education, with half of that money to go to high-performing schools.

The Senate spending plan also increases road funding. It puts $200 million a year in a new “Major Moves 2020” transportation fund to pay for additional lanes on Interstate 70 and Interstate 65 crossing the state. It also adds $112 million for state road and bridge construction, plus another $101 million in new funds for local roads.

But the local road repair money is conditional under the Senate plan: Only counties that have, or agree to impose, an excise surtax and a wheel tax will be eligible to get the additional money.

Long said the Legislature wants to invest in infrastructure, but thinks local governments need to step up, too.

“We think they ought to have some skin in the game if they want this free money from the state,” Sen. Luke Kenley said.

The budget bill passed out of the Senate Appropriations Committee on Thursday on a 9-4 party line vote. Democrats derided the proposed income tax cut, saying the money should be spent on schools and health care.  

Democrat Sen. Lindel Hume of Princeton said the average Hoosier, making $50,000 a year, would see only $50 from the tax cut: “Less than $1 a week.”

“It’s just wrong for us to do that,” Hume said. “Most of the people in this state could care less about that dollar a week, and we seriously need that money to fund this state,” Hume said.

Maureen Hayden covers the Statehouse for the CNHI newspapers in Indiana. She can be reached at maureen.hayden@indianamediagroup.com.

1
Text Only | Photo Reprints
State News
  • Deputy: No vehicle involved in fatal Cicero bike crash CICERO (AP) — Investigators say a 20-year-old bicyclist who was killed in a crash in a central Indiana town wasn't struck by a vehicle. Nicholas Camp of Cicero was pronounced dead at an Indianapolis hospital after he was injured in the crash in Cicer

    July 25, 2014

  • Holiday World plans new winged roller coaster SANTA CLAUS (AP) — The Holiday World amusement park in southern Indiana says it's building a new roller coaster that will launch riders to 60 miles an hour in 3.5 seconds, with a 14-story loop among four inversions. Plans for the Thunderbird were ann

    July 25, 2014

  • Man dies after being hit by sheriff's prisoner van INDIANAPOLIS (AP) — Police say a man has died after he was hit by a sheriff's department prisoner transport van on an Indianapolis street. City police spokesman Officer Christopher Wilburn says witnesses told investigators that the man was lying on t

    July 25, 2014

  • Murder, rape charges filed in SW Indiana attack BLOOMFIELD (AP) — Prosecutors have charged a 35-year-old man with fatally shooting a man outside his rural southwestern Indiana home and then raping a woman inside the home. Greene County prosecutors filed murder, rape and other charges Thursday agai

    July 25, 2014

  • Teen Pilot-Crash [Duplicate] [Duplicate] Family: Indiana teen pilot who crashed in ocean knew risks PLAINFIELD (AP) — Haris Suleman knew that flying around the world carried risks. But like adventurers before him, the 17-year-old pilot from Indiana also believed dreams aren't achieved without taking chances. "Why does any explorer undertake the nec

    July 24, 2014 1 Photo

  • Indy. Man who avoided prison time for rape resentenced INDIANAPOLIS (AP) — An Indianapolis man who was placed on home detention after being convicted of drugging and raping his then-wife is going to prison for violating his probation. The ex-wife of 52-year-old David Wise said she felt "sucker punched" b

    July 24, 2014

  • Judge rules Indiana hog farms protected by law WINCHESTER (AP) — A judge has ruled state law protects the operator of large hog farms from lawsuits filed by residents of an eastern Indiana county. The lawsuits against North Carolina-based Maxwell Farms accused it of allowing hog waste to accumula

    July 24, 2014

  • Ex-Indy officer appeals convictions in fatal crash INDIANAPOLIS (AP) — A former Indianapolis police officer is appealing his convictions for killing one motorcyclist and seriously injuring two others while driving drunk in his police cruiser. A brief filed by public defenders Wednesday claims the jud

    July 24, 2014

  • Ex-Indiana officer pleads guilty in $150K theft FRANKFORT (AP) — A former central Indiana police officer has pleaded guilty to charges that he stole nearly $150,000 from a company for which he transported cash. Former Frankfort police Lt. Randy Emery avoided jail time as a judge sentenced him to t

    July 24, 2014

  • Court rules prison agency mistreated former Pendleton counselor INDIANAPOLIS (AP) — A federal appeals court has ruled that Indiana's prison agency mistreated a female employee when it shrugged off her complaints about workers having sex on her desk and later fired her for having an affair with an official. The ap

    July 23, 2014

Hyperlocal Search
Premier Guide
Find a business

Walking Fingers
Maps, Menus, Store hours, Coupons, and more...
Premier Guide
Poll

The Pence administration continues to cut Indiana agency budgets despite a state surplus of $2 billion. Is this wise management of state funds?

Yes
No
Not sure
     View Results
Featured Ads
AP Video
Raw: Massive Dust Storm Covers Phoenix 12-hour Cease-fire in Gaza Fighting Begins Raw: Bolivian Dancers Attempt to Break Record Raw: Israel, Palestine Supporters Rally in US Raw: Palestinians and Israeli Soldiers Clash Raw: Air Algerie Flight 5017 Wreckage Virginia Governor Tours Tornado Aftermath Judge Faces Heat Over Offer to Help Migrant Kids Kerry: No Deal Yet on 7-Day Gaza Truce Kangaroo Goes Missing in Oklahoma More M17 Bodies Return, Sanctions on Russia Grow Gaza Residents Mourn Dead Amid Airstrikes Raw: Deadly Tornado Hits Virginia Campground Ohio State Marching Band Chief Fired After Probe Raw: Big Rig Stuck in Illinois Swamp Cumberbatch Brings 'Penguins' to Comic-Con Raw: Air Algerie Crash Site in Mali Power to Be Restored After Wash. Wildfire Crashed Air Algerie Plane Found in Mali Israel Mulls Ceasefire Amid Gaza Offensive
Parade
Magazine

Click HERE to read all your Parade favorites including Hollywood Wire, Celebrity interviews and photo galleries, Food recipes and cooking tips, Games and lots more.