Gov. Pence not backing down on tax cut proposal

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In the midst of an ongoing budget battle with members of his own party, Gov. Mike Pence told local economic leaders he has no plans to back down on his calls for a ten-percent income tax cut.

Gov. Pence addressed a group of local economic leaders at the Indianapolis Chamber of Commerce luncheon Wednesday, using his speech to again make his case for tax relief.

However, it’s been a tough sell in the General Assembly. The House-authored budget made no cuts to the personal income tax rate, while the Senate budget plan cut income tax by 3 percent. Pence said this week’s state revenue forecast proves the state can afford a larger tax cut, with an estimated $290 million in increased revenue headed to the state over the next two years.

“Reducing income taxes means more jobs, and I believe Indiana should seize this moment to make that a reality in our state,” said Gov. Pence. “Indiana has the ability to fund our priorities including increases in roads and schools, and provide a blend of tax relief that includes the ten percent.”

Pence seemed to suggest he may be willing to accept a longer phase-in for the tax cut, spreading it out over a longer period of time than the two-year plan he had originally suggested.

“The details of how we do that and when it’s phased in, we are all talking through,” he said. “But I think the objective of arriving at a 10 percent income tax reduction is important.”

“If we’re going to spread it over a number of years why not make the decision which we know we make now,” said Senate appropriations chair Luke Kenley, R-Noblesville. “Then if the time comes, then we can make that decision then. I don’t know what the point would be of making that decision now.”

Wednesday, a joint House-Senate committee heard testimony from supporters and opponents of the tax cut plan.

“There are going to be tax cuts of a half billion dollars, tax cuts that will touch everyone in the state of Indiana,” said House Ways and Means Chairman Tim Brown, R-Crawfordsville, referring to other proposed tax cuts, including a cut to the inheritance tax which Gov. Pence now supports.

“I think compromise is a two way street,” said Sen. Kenley of the talks with the Governor. “Maybe he can compromise too.”

The conference committee will continue to debate the budget until an agreement is reached before the end of the session on April 29.