Senate budget includes small tax cut

INDIANAPOLIS (WISH) — A cut in the state income tax has been revived in the newest version of the state budget, but it's not the cut the GOP governor is seeking.

Mike Pence wants a 10 percent cut in the income tax. The state Senate version of the budget includes a 3 percent cut. For someone who earns $50,000 a year, the tax cut is worth just $50.

Governor Pence reacted to the Senate budget by saying he's encouraged but not satisfied.  He continues to pursue a 10 percent cut but is happy to see an income tax cut of any size back on the table.

"I'm pleased that this budget includes permanent income tax relief for every Hoosier," he said.

Sen. Luke Kenley (R-Noblesville) unveiled the budget at a Thursday committee meeting. 

"In this budget we cut the income tax, the individual income tax, from 3.4 to 3.3 percent effective January 1, 2015," he said.

Democrats ridiculed the move.

"If it weren't so serious," said Sen. Lindel Hume (D-Princeton), "it would be a joke."

But all of the Republicans voted for it and they have a supermajority in the Senate.

"It's a responsible budget," said Sen. Brent Waltz (R-Greenwood). "We are keeping as much money as possible in the hands of the people who are earning it."

And the governor wants to send the message that he is no longer at odds with state lawmakers.

"I think Hoosiers looking on should draw the inescapable conclusion," he said, "that we are beginning to come together."

But the Senate budget is also missing the Automatic Taxpayer Refund that was in the governor's budget and it also spends more on schools than the governor's budget did.  But, overall, it's a budget that highlights the priorities held by lawmakers while giving the governor a political victory he needs.

It now heads to the Senate floor.

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