House budget moves forward without income tax cut

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INDIANAPOLIS – Gov. Mike Pence didn’t get much help from state lawmakers Tuesday in making his promised 10 percent income tax cut a reality.

The budget-writing House Ways and Means Committee passed a 2-year, $30 billion budget that does not include the tax cut. The vote sends the budget to the full House for a vote early next week.

The Senate Tax and Fiscal Policy committee discussed two budget bills that included the tax cut but didn’t vote on them.

Rep. Tim Brown, R-Crawfordsville, said the tax cut isn’t dead, but its future is uncertain.

“We’re waiting for more information relating to the revenue forecast,” said Brown, who chairs the House Ways and Means Committee. “And also the potential of sequestration as it impacts Indiana.”

Brown is among those who say they don’t know if the state can afford the $500 million tax cut. Instead of focusing on that issue, the House budget spends more money on schools and roads.

The tax cut issue has put House Republicans at odds with the Republican governor.

Pence campaigned on the tax cut and has made it a priority for his administration. He called the House budget “disappointing.”

The situation raises the question of whether the Senate will try to insert the tax cut into the budget after the House sends it over.

Sen. Mike Delph, R-Carmel, made it clear that he hopes that happens.

“It’s the people’s money, whenever you have a projected surplus, that means the government is taking in more than it’s spending,” Delph said. “So I think there’s an obligation and it’s incumbent upon the government to return that money to the taxpayer.”

Sen. Luke Kenley, a Noblesville Republican who plays a key role in the budget-writing process, did not commit to the tax cut. He’s still leaving the door open.

“I think we need to fulfill the obligations that we’ve made,” Kenley said. “And if we can do that, and deal with his tax cut, then we’ll see if we can work that out.”

The issue will likely not be resolved until after a revenue forecast in April. That will be the last available look at the state’s finances before lawmakers meet the deadline for passing the budget.