Saturday, April 6, 2013

Senate budget: new hope for Pence

Posted By on Sat, Apr 6, 2013 at 4:00 AM

click to enlarge Lesley_Stedman_Weidenbener_-_mug_-_The_Statehouse_File.jpg
By Lesley Weidenbener

Gov. Mike Pence has been talking persistently about passing his proposed income tax cut for months - since even before the General Assembly's 2013 session began.

In fact, it was the cornerstone of his campaign.

Still, it was striking this week to see just how much emphasis Pence has put on the proposal. He held a press conference almost immediately after the unveiling of the Senate Republican version of the state's budget - a spending plan that included a taste of his tax cut - and called it a "good start."

That may seem fairly innocuous. But keep in mind that after the Republican-controlled House released a budget that didn't include the tax cut, Pence said Hoosiers "deserve better." Then a tea party-backed group that supports Pence started an ad campaign attacking House Republicans.

But it wasn't just the words Pence used on Thursday to talk about the solid "framework" he believed the Senate had created for the final budget negotiations that will take place in the coming weeks. It was the tone.

Pence appeared, well, smiley. Hopeful. Determined.

It's not that he's lacked these qualities before. But he has occasionally seemed frustrated that he was not getting much of what he wanted from legislative leaders - his fellow Republicans.

Gov. Mike Pence said Thursday that the Senate budget - which includes a small income tax cut - is a "good start" for final budget negotiations. Then the Senate's nod to his tax proposal seemed to buoy his outlook.

Of course, lawmakers still seem far from giving Pence what he wants - a 10 percent cut in the individual income tax rate. That would save the median household, which has an income of roughly $46,000, about $156 annually.

The House ignored the request, choosing to spend money on schools and roads, pay off some state debt, pay for university buildings in cash and speed up a phase-out of the inheritance tax.

"I am very disappointed in the House budget proposal," Pence said back in February. "Despite having the largest budget surplus in history, this House budget increases spending without giving hardworking Hoosiers one cent of new tax relief."

The Senate budget released this week spends roughly the same on schools, spends even more on roads, would authorize new bonding that increases state costs in the future, and spends little to retire old debt. By most accounts, the Senate budget spends more than the House version and some Republicans say it will take the budget out of balance in just a few years.

It certainly leaves the state with less money in the bank - although Senate Appropriations Chairman Luke Kenley says that's not the case when money now dedicated to a health care program that will be eliminated later this year is factored in.

What the Senate budget does have is an income tax cut. It's a small one - just 3 percent. It would save the same median Indiana household just $46 - about $110 less than Pence's plan.

But Pence said that's a start.

At the press conference Thursday, the governor was asked what else he liked about the Senate budget. What - other than the tax cut - made him so much happier with the Senate plan than he was with the House budget?

Pence didn't seem to have an answer. He didn't mention anything else he specifically liked, even though the Senate plan does have a few other Pence goodies in there, including funding for a technology center he wants.

Instead, this is how Pence answered the question:

"Well, let me say, I called it a good start. And I believe it really does represent good faith by all parties. Look, I know we've been involved in a vigorous discussion in this building about which taxes to cut and by how much - which by the way is not the argument most states are having right now. I think Hoosiers should be grateful that because of our fiscal strength, we're actually debating which taxes to cut and by how much and how much to increase funding of roads and schools with dollars that we have."

What I heard and what others likely heard, too, is that it's the individual income tax cut that matters. Period.

Knowing that puts legislative leaders in an incredibly strong position to get whatever else they want. But does it make it likely that Pence will eventually get what he wants: A full 10 percent cut in the individual rate? Well, that seems doubtful. But he's made clear he'll keep trying.

Lesley Weidenbener is managing editor of TheStatehouseFile.com, a news service powered by Franklin College journalism students and faculty.

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