INDIANAPOLIS | Gov. Mitch Daniels told a group of Indiana business entrepreneurs Monday he hopes to further cut state taxes before his term is up.
"I've always had my eye on, and still do if the clock doesn't run out, the individual income tax," Daniels said.
But the second-term governor admitted doing that before he leaves office in early 2013 is going to be harder than his earlier property tax cut, due to the state's fiscal situation.
Since July, state revenue has been $300 million less than the state budget anticipated. That has led Daniels to order cuts in state agency budgets, and 33 state employees were laid off on Friday.
"We're going to have to work very hard to simply pay the absolutely basic, essential bills for public service in this state while we wait for revenues to catch back up," Daniels said.
Speaking to 112 participants at an Entrepreneurs' Organization event in Indianapolis celebrating the first Indiana Entrepreneurship Day, Daniels said Indiana's favorable tax and regulatory climate sets it apart from other states.
"Our current policy for winning versus our competition, the other states, is: stand still," Daniels said. "If we can somehow manage simply to avoid raising taxes, which now more than 40 other states have done, our competitive position gets a little bit stronger each time one of them does that."
The Republican governor said Indiana has been using those advantages to lure businesses from other states. So far this year, 42 companies have closed operations elsewhere and consolidated in Indiana, he said.
Home-grown businesses also are encouraged to stay in Indiana by taking advantage of the state's venture capital tax credit and its patent income exclusion, under which some income goes untaxed for patented Indiana inventions, Daniels said.
Daniels encouraged the entrepreneurs at the event to "go out and make money" because they will in turn pay taxes and create new jobs, which leads to more tax revenue as employees get paid and spend money.
"There is no single factor more important to the future of this state than the flowering of a culture of entrepreneurism in Indiana," Daniels said.
