Governor Mike Pence Tuesday presented state lawmakers with the budget plan that makes his promised 10% cut in the state income tax possible, but there’s a price.
The price is an increases in school spending that don’t keep up with inflation. Governor Pence wants to phase in the tax cut with half of it taking effect this year and half of it taking effect next year. The result is 1% increases in money to public schools as well as state universities in each year of the 2-year budget. Inflation is 2.5%
New state budget director Chris Atkins gave the numbers to lawmakers on the state budget committee spelling out a proposal that would also lead to a $2.3 billion surplus at the end of the budget and an automatic taxpayer refund at the end of each budget year.
“Why cut income taxes by 10%?” asked Atkins. “Most importantly, it would permanently lower taxes on most small business owners and employers and it would put $500 million directly back into our economy by letting Hoosiers keep more of their own money.”
The reception was a chilly one. “We’d like to be heroes and cut taxes,” said state Sen. Luke Kenley (R-Noblesville,) “you also need to be prepared to take care of your priorities and you need to have enough money to do that.”
The Pence budget now works it’s way through the General Assembly in a process that won’t conclude until the end of April. Governor Pence will make a statewide sales pitch for it next Tuesday in his first State of the State address.
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