INDIANAPOLIS | The state's most powerful business organization on Monday added its voice to the chorus of legislative leaders skeptical that Indiana can afford the 10 percent income tax cut proposed by Republican Gov.-elect Mike Pence.
Kevin Brinegar, president of the Indiana Chamber of Commerce, said with lawmakers looking to restore prior cuts to education spending and the state likely facing added Medicaid costs due to Obamacare, Pence's plan to reduce the individual income tax rate to 3.06 percent from 3.4 percent might not be possible.
"We won't be able to do it all so there's going to have to be some prioritization that takes place, and lots of legislators have lots of ideas. The governor-elect has ideas and those ideas and those priorities will have to be reconciled," Brinegar said at an Indianapolis luncheon.
Pence's proposed tax cut would be phased in over two years, reducing state revenue by approximately $500 million each year.
While Indiana has a $2 billion budget reserve, slow economic growth and the impact of already scheduled inheritance and business tax cuts have prompted a "lukewarm reception" for Pence's tax cut plan, Brinegar said.
Republican legislative leaders also have been reluctant to endorse Pence's proposal.
Meanwhile, the Chamber will ask lawmakers to speed up the 10-year phaseout of the state inheritance tax and eliminate altogether the property tax on business machinery and equipment.
"These investments are the engines of competitiveness and we think that we should not tax those investments of machinery and equipment," Brinegar said.
On education, Brinegar said the Chamber continues to support education reform efforts and would like to see state-funded preschool opportunities for low-income Hoosiers.
He said the business group also seeks to end "dues check-off" for teachers unions, which would require teachers to pay their monthly dues via cash or check rather than permitting those payments be deducted directly from paychecks.
Brinegar said other issues the Chamber plans to focus on during the 2013 session include eliminating township government, improving college completion rates, restructuring business tax incentives, preventing unemployment insurance fraud and ensuring Indiana has the water and energy resources it needs for the future.
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