Hendricks County Flyer, Avon, IN

Local News

April 10, 2013

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

INDIANAPOLIS —  

Indiana Gov. Mike Pence appears 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.

Last week, 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. 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.

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