From the Richmond Palladium-Item:
Wayne County’s three representatives to the Indiana General Assembly, Republicans all, are taking a wait-and-see approach to Gov. Mike Pence’s pledge of a 10 percent across-the-board cut in the state’s income tax rate that would return $500 million over two years to taxpayers.
Did we mention these are members of the new governor’s own party?
At Friday’s Wayne County Legislative Forum, hosted by the Indiana University East Alumni Association, state Sen. Allen Paul of Richmond, Rep. Tom Saunders of Lewisville, and newly seated Rep. Dick Hamm of Richmond all sounded a little like veteran senior statesmen counseling a freshman governor on the perils of cutting revenues before the state can gain a solid measure on uncertain costs.
While Pence understandably wants to make his mark, entering office in his first year and dropping Indiana’s already comparatively low 3.4 percent income tax rate to around 3 percent, this could ultimately prove an unwise course of action.
The governor, in his recent and first State of the State address, essentially chided legislators with his remarks, “Let’s be honest with our fellow Hoosiers, we can afford to do this.”
Honesty is, as they say, the best policy.
Everybody prefers paying fewer rather than more taxes. That is clearly one bit of honesty our local legislators can understand and respect.
But honesty also demands that a new governor itching to grant a tax break from the substantial $1.4 billion surplus left by his predecessor, Mitch Daniels, needs to look at the bigger picture. The former governor already provided each Hoosier an average $111 refund for 2012, his final year in office. He was entitled to; the surplus was accrued on his watch, during his eight years as governor.
We hope that Mike Pence, if he elects to do so, will enjoy that many years as governor and will similarly maintain Indiana’s books squarely in the black.
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As Hoosiers, we can argue and disagree over just how much impact leaner state spending has had on critical government services like education, or the state’s Department of Child Services. There has clearly been an impact.
But the higher and firmer ground going forward would be for the new governor to balance any tax cut on his own future performance, not his predecessor’s past performance.
Republicans have strengthened their majorities in both chambers of the legislature. That means they can do pretty much what they want. For the sake of the state and an uncertain future, the prudent course is a conservative one until such time, perhaps even a year from now but certainly within Pence’s first term, Indiana can demonstrate the surplus revenues to provide an income or other tax cut.
See the full article here:
http://www.pal-item.com/apps/pbcs.dll/article?AID=2013301270002
