Kokomo Tribune; Kokomo, Indiana

February 6, 2013

No detour on road map to tax cut

Pence says ‘lower income taxes means more jobs’

By 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, 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 — 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, and that would result in a $500 million loss in state revenue.

And the Republican governor brushed back 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 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 budget-makers 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” re-investment 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 jobs- and education-focused “Roadmap for Indiana” that he rolled out during the campaign.

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

He talked about the education legislation 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 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 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 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 newspapers in Indiana, including the Kokomo Tribune. She can be reached at maureen.hayden@indianamediagroup.com.