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March 12, 2014

Indiana House leader: Tax, preschool deals near

INDIANAPOLIS — Republican leaders working on a series of last-minute compromises on top-tier issues of tax cuts, preschool and road funding announced Tuesday they were close to final agreements.

“I say agreement in principle because we still have to look at language,” House Speaker Brian Bosma, R-Indianapolis, said. “The leaders, including our fiscal leaders, have agreed in principle on these issues and we’re putting language together to make sure we’re on the same page with some of the details.”

Plans that would cut business taxes, establish a preschool program for low-income children and spend up to $400 million on new road construction were close to winning final approval, with lawmakers preparing to wrap up work on their 2014 session Thursday.

House and Senate Republicans announced a compromise Tuesday on a series of business tax cuts. The compromise package further cuts the state’s corporate and financial institution taxes gradually through 2023. It also would allow counties to eliminate the business personal property tax, which is levied on business equipment, in two ways: by letting counties eliminate the tax on small businesses and by allowing counties to exempt new business equipment and companies that relocate to Indiana.

The cuts amount to more than what Senate or House Republicans had initially proposed but are still significantly less than what GOP Gov. Mike Pence sought at the start of the session, when he called for the complete elimination of the tax.

The plan quickly drew concerns from lobbyists for Indiana’s local governments, which have sought to have the state replace any money lost because of the tax cut. But the prospect that the cuts would not take effect until July 1, 2015, after the General Assembly holds another session and draws up a new budget, left them hopeful.

“I think the most important thing to realize is that there’s no single dollar of immediate lost revenue to local governments. That’s first and foremost to us,” said Matt Greller, executive director for the Indiana Association of Cities and Towns.

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