Photo: Jasont82 (Wikimedia)
The newest state revenue estimates forecast that Indiana will be able to afford Governor-elect Mike Pence’s proposal for a 10-percent, across-the-board individual income tax cut. But lawmakers are still taking a wait-and-see approach.
Pence estimates his tax cut would leave the state with nearly $800 million dollars less in revenue over the next two budget years. But he also projects state revenues will grow enough to more than offset that. A new revenue forecast unveiled Monday falls in line with those projections. But Senate Appropriations chair Luke Kenley (R-Noblesville) says the success of Pence’s proposal will come down to the legislature’s priorities.
“There’s going to be a push to spend a lot of money on things that maybe haven’t been spent in recent years and there’s going to be other pushes that say, ‘Look, we started down the path towards a leaner, smaller government, we need to keep going down that path.’ I think it’s going to be a pretty lively discussion the next four months,” Kenley says.
Sen. Karen Tallian (D-Portage), who sits on the State Budget Committee, says Pence’s tax cut simply requires too much money.
“All these agencies and everybody has already taken a huge hit so we can’t afford to give away all the growth for the next two years into a $50 tax cut.”
Kenley says it will be easier to judge the feasibility of Pence’s proposal when the revenue forecast is updated again in April.