2013 Indiana General Assembly

Pence may accept delayed implementation of income tax cut

2013-04-17T18:15:00Z 2013-04-18T14:57:09Z Pence may accept delayed implementation of income tax cutDan Carden dan.carden@nwi.com, (317) 637-9078 nwitimes.com
April 17, 2013 6:15 pm  • 

INDIANAPOLIS | Moments after delivering a "no compromises" defense of his proposed income tax cut, Republican Gov. Mike Pence hinted Wednesday he's willing to implement the reduction over several years instead of the two years he promised on the campaign trail.

"My objective remains that we're going to lower the personal income tax rate by 10 percent," Pence said. "But we're going to continue to work in good faith through the details of how we bring that about in the state budget process."

Asked directly if he would accept a smaller reduction in the 2014-15 budget under review by a House-Senate conference committee if he was promised the rest of the tax cut in the future, Pence did not deny he's considering it.

"We're involved in very fruitful and respectful and good-faith discussions with members of the General Assembly," Pence said. "We're continuing those discussions."

Senate Appropriations Chairman Luke Kenley, R-Noblesville, said Pence would be better off accepting the Senate plan to reduce the income tax rate to 3.3 percent in 2015 from 3.4 percent, along with additional reductions in corporate and inheritance taxes, rather than trying to lock in tax cuts years from now.

"When the time comes, if we can do it, then we can make that decision then," Kenley said. "I don't know what the point would be of making that decision now."

The point is well understood by Pence, who has made his tax cut the top item on his otherwise noncontroversial legislative agenda.

Failing to at least appear to get the 10 percent reduction he's spent most of his four months as governor talking about all over the state would make him seem weak, especially with Republican supermajorities in the House and Senate at his disposal.

Pence also believes cutting the income tax rate to 3.06 percent will boost the state's economy and create jobs. He told the Indianapolis Chamber of Commerce on Wednesday that reducing income taxes is the best way to spur growth.

"I truly do believe that tax relief and tax reform is and must be the centerpiece of making Indiana more competitive in the months and years ahead," Pence said.

State lawmakers are set to continue working on a compromise budget proposal that must be approved before the April 29 mandatory adjournment of the General Assembly. The spending plan will take effect July 1.

Pence declined to say whether he'd veto budget legislation that doesn't include a 10 percent income tax cut.

The Times has learned legislative leaders are considering pre-emptively scheduling a special session date in May if needed to override a possible Pence veto.

Just a simple majority is needed for the Legislature to enact a law the governor has rejected.

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