Pence tax cut gets new life from House Democrats

By Rick Yencer

INDIANAPOLIS, IN  - Gov. Mike Pence's proposed income tax cut left out of House Republicans' budget plan will get new life from House Democrats as lawmakers decide how to deal with a record state surplus.

 House Republicans came out of their budget plan Friday that restores money cut from public schools and also provides new money for Indiana highways.

What it did not do was include a 10 percent income tax cut proposed by Pence to put money back in Hoosiers' pockets and help grow jobs. While Republican House leaders, like new Ways and Means Committee Chairman Tim Brown, a Republican from Crawfordsville says a tax cut is not out of the question, it is House Democratic Leader Scott Pelath of Michigan City who said that tax cut will get heard in the House and voted on.

 Rep. Sue Errington, D-Muncie, thought the turnabout was interesting as Democrats are defending Pence's tax cut while Republicans want to restore money to education.

"It is interesting to observe how the Republicans in the House and the governor are interacting,: said Errington, who serves on the House Education Committee.

Rep. Jack Lutz, R-Anderson, said it was early in the budget game and there was tax relief in the Republican proposal by accelerating the phase out of the inheritance tax.

Lutz, busy serving on the public policy and utility and energy committees, believe the next state budget will give priority to education and economy that are the two main issue facing Hoosiers and the Statehouse.

Pence, who represented Muncie as an Indiana congressman, expressed disappointment with lack of the tax cut, given the $2 billion surplus the state has and the need to stimulate the economy.

"By leaving income tax relief out...this House budget proposal does not contain the kind of balanced budget approach that will create jobs and opportunity for Hoosiers,"  said Pence. "With so many hurting in this economy, Hoosiers deserve better."

 Pence even pointed out how businesses and estates got tax breaks and it's time for the average Hoosier to get a break too.

 Pelath said he could not agree more, as Errington posted his statement on her Statehouse website that it was a bold idea and would see a vote and support from Democrats.

 Errington said the Democrats would roll out their budget next week, but with Republicans holding a super majority, it's still doubtful that Democrats in the House and Senate will be any more than observers.

The numbers under the Republican budget would increase education by 2 percent the first year and one percent the second for an all time high of $6.7 billion. That would cover the $300 million cut in the last budget.

 Transportation would get $250 million more and more sales and gasoline tax revenue would be diverted to state and local governments.

 There's still no consensus on how Indiana will expand Medicaid under the Affordable Care Act after Pence said it would only be done under the Healthy Indiana Plan.

Pence told the federal government that Medicaid is broken and it would cost as much as $8 billion over the seven years.

Errington said the expansion of Medicaid could be an economic boon with more jobs and more health care for those who need it. She did not understand the governor's thinking other than to say he could not get past the politics of affordable care that some Republicans continue to call Obamacare.

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