RICH JAMES: Pence's tax cut plan doesn't make sense

2013-03-03T00:00:00Z RICH JAMES: Pence's tax cut plan doesn't make senseBy Rich James nwitimes.com
March 03, 2013 12:00 am  • 

There is something about Gov. Mike Pence’s proposal to cut the state income tax by 10 percent that keeps eating at me.

While I enjoy a tax cut as much as the next guy, Pence’s plan just doesn’t make sense.

And his Republican friends who run the House and Senate seem to have the same thoughts.

There is something terribly wrong with this picture.

One would think a Republican-controlled General Assembly would welcome with open arms a tax-cut proposal from a brand new GOP governor. Republicans are supposed to get along.

But the Republican legislative leaders thus far have been loud and clear — there are greater priorities in Indiana than slicing the income tax.

Because he touted his tax cut on the campaign trail, one would think the legislative leaders would have worked something out to go along with Pence’s call for the reduction.

It is pretty much a kick in the teeth for Pence, who was told to leave his tax cut at the Statehouse door.

I admire the Republican leadership for doing so.

A 10 percent income tax cut would reduce state government revenue by $534 million. That’s every year, not a one-time shot.

It’s not hard to figure out that Pence hasn’t spent a lot of time in Indiana recently.

If he had, he would know the $300 million cut from public school funding in 2010 has created myriad problems.

That money and cuts from other agencies should be restored.

Also on the money side, Pence’s proposed budget includes a 1 percent increase for K-12 education. That’s about $63 million a year. In the grand scheme of things, that’s chump change.

Pence also would make an additional 1 percent funding increase available to schools rated A or B with a 90 percent graduation rate or a 90 percent pass rate on third-grade reading tests.

In other words, he would reward the more affluent schools attended by the children of the more affluent parents.

Seems to me the money ought to go to the schools where students struggle for a variety of socioeconomic reasons.

It’s kind of one of those Republican versus Democrat kind of things.

Pence tries to justify the tax cut by saying it will result in job creation by those who reap the greatest benefit.

I can’t buy that any more than Republican claims President Barack Obama’s tax hike on the very wealthy would hurt job creation.

The more I think about it, it’s becoming clear Pence’s tax cut plan played well on the campaign trail but bombed in the legislature. You have to wonder if he expected that all along.

Rich James has been writing about state and local government and politics for more than 30 years. Email him at rjames@219.com. The opinions are the writer’s.

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