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February 8, 2013

Pence still pressing for income tax cut

Maureen Hayden CNHI

INDIANAPOLIS — Despite the frequently repeated doubts expressed by legislative leaders about his proposed 10-percent cut in the state income tax rate, Indiana Gov. Mike Pence is forging ahead.

During an informal meeting with Statehouse reporters Wednesday — in which tape recorders were banned but pen and paper allowed — Pence said he’s taking his case for the cut to individual lawmakers and out to the public.  

“Indiana is one of the few states in the country that can afford it, and people deserve to know that,” Pence said.

During the hour-long session with reporters, the shirt-sleeved Pence said his role is not to be “legislator in chief.”

But he made clear — again and again — that he wants the Indiana General Assembly to pass his version of a two-year budget that includes his proposal to reduce the individual income tax rate, from 3.4 percent to 3.06 percent. That would result in a $500 million loss in state revenue.

And the Republican governor brushed back the concerns of Republican legislative leaders who’ve questioned the viability of his plan, given an uncertain economy ahead and other tax cuts already in the making. He noted that the state’s monthly revenue report, released Monday, showed the state taking in 8 percent more revenue that month than forecast in December.

Pence said he’s heard the anti-cut talk, “about having to choose between increased funding for schools or roads and doing tax relief.”

“I think that’s a false choice,” Pence said.

Some key budgetmakers in the General Assembly may disagree.

Senate Appropriations Chairman Luke Kenley and Senate Tax and Policy Chairman Brandt Hershman, both Republicans, have voiced skepticism about the Pence plan, noting that last year’s legislature approved both a reduction in the corporate income tax and the phase-out of the inheritance tax.

Both Kenley and Hershman said they’ll consider the Pence cut proposal, but have also talked about the need to do some “strategic” reinvestment in programs and services that were cut in previous years to balance the budget.

Pence’s argument, which he repeated to reporters Wednesday, is that Indiana had to keep cutting taxes to be competitive with neighboring states, including Ohio, that have announced plans to cut their income tax rates.

“I think lower income taxes means more jobs,” Pence said.

Now in his fourth week in office, Pence has spent much of his time talking about his tax cut proposal and his “Roadmap for Indiana” that he rolled out during the campaign, which focueses on jobs and education.

For most of the hour spent with reporters Wednesday, he resisted veering off that road map.

He talked about legislation conerning education he favors that would expand the state’s private-school voucher program for low-income families, for example.

But he declined to say much about his recent meeting with state Superintendent of Public Instruction Glenda Ritz, a Democrat who opposes the voucher program and many of the education reforms that Pence favors.

Pence did say that he doesn’t support eliminating the automatic taxpayer refund put in by former Gov. Mitch Daniels. Some lawmakers have proposed getting rid of the refund to make up for the revenue loss that would come with cutting the personal income tax rate.

Pence also made clear that he wouldn’t be weighing in any time soon on a number of issues that aren’t on his road map. Pence said there is a broad range of legislation that he “won’t have anything to say about” until it reaches his desk, for the required signature to become law — or the veto to kill it.  



Maureen Hayden covers the Statehouse for CNHI, the Tribune-Star’s parent company. She can be reached at maureen.hayden@indianamedia

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