Pence proposes $500M in tax cuts for 2013-14 Medicaid forecast is fully funded
By Rick Yencer
INDIANAPOLIS, IN - Gov. Mike Pence proposes to give a half a billion in income tax cuts, slightly increase education spending and fully fund the Medicaid forecast in a new two-year state budget.
With a projected increase in Medicaid enrollment and looming Affordable Care Act obligations, Pence already decided the state would not form its own health care system in place of ACA. Medicaid spending is now $1.65 billion yearly and projected to $2.1 billion by 2015. That projection is covered but no money was put in Medicaid to expand it under the federal health care act.
"Our budget is honestly balanced, funds our priorities, holds the line on spending, returns excess revenues to hard working Hoosiers, and builds our reserves," said Pence in the budget's executive summary.
The $29 billion budget was offered at a State Budget Committee meeting this week, the day after Pence took office. The 10 percent income tax cut has been a campaign platform for much 2012, and some lawmakers question whether to commit any of the state's $2 billion reserve to another tax cut.
Pence increased K-12 education by 1 percent or about $190 million with $63 million a year. Another $64 million in the second year would be split among high performing schools in the state. And permanent funding for full day kindergarten is included. There's $6 million to launch technical and vocation education in every high school.
Higher education also gets a 1 percent hike and earmarks $19 million for universities and colleges to maintain and renovate buildings. And there's $18 million over two years for adult workforce programs
All those increases would still be below the average 2.5 percent annual inflation.
Transportation would see an extra $347 million established in a new fund, although it is not obligated for specific projects like extend Interstate 69 to Bloomington and Indianapolis from Evansville.
Chris Atkins, Pence's budget director, indicated the state should be pretty well funded with collecting $518 million more in taxes it spends in the first year and $759 million more in the second year.
Area lawmakers had mixed views on the tax cut and Pence's spending measure.
Rep. Bill Davis, R-Portland, had not see the proposal, and declined to talk about the tax cut while Republican leaders in the House wondered if the state should give reserves back to the people.
The minority leader in the Senate, Sen. Tim Lanane, D-Anderson, said past spending cuts to education should be restored because tax cuts are made. And he said Medicaid expansion should not be ruled out for implementing Affordable Care Act.
"the governor's budget is a starting point for discussion," said Lanane.
Rep. Sue Errington, D-Muncie, wanted to see more support for K-12 since public schools took some big hits in the last few years.
"It would be good to seen them made whole now that the state is in better shape," she said.
Errington would not commit to the tax cut, saying lawmakers would have a chance to hear testimony, ask questions and them form an opinion on the tax cut to know if it is the best course of action.