By Abdul Hakim-Shabazz in the Evansville Courier & Press:
I think it’s interesting that the political class in the great Hoosier state is all abuzz over the “budget battle” between
Gov. Mike Pence and Indiana House Republicans over the fact that the House Rs did not include Pence’s 10 percent income tax in their initial budget.
Of course, it’s news when the governor and House lawmakers disagree, but there are couple things to keep in perspective.
First, anyone who has been paying attention knows that the House leadership has not been crazy about the income tax idea. Second if this is Indiana’s biggest problem, we’re in pretty good shape.
Allow me to map out a few thing. I recently took a look at both Pence’s and the House R’s budget plans. Here’s what they look like side-by-side:
Overall spending
Pence: Approximately $29.2 billion over the biennium
HRs: Approximately $30.076 billion over the biennium
Reserves
Pence: Capped at 12.5 percent for the biennium
HRs: $1.9 billion (12.6 percent in Fiscal Year 2014), $2.1 billion (13.9 percent in FY 2015)
Tax cuts
Pence: 10 percent cut in income taxes
HRs: Speed up phase out of inheritance tax to Jan. 1, 2018 instead of Jan. 1, 2022.
Education
Pence: 2 percent potential increase: automatic 1 percent increase in first year; year two increase based on performance
HRs: 3.3 percent total increase ($344 million total): 2 percent increase in first year, 1 percent increase in year two. Also an additional $16.7 million to reward performance
Both fund full-day kindergarten.
Roads
Pence: One-time $347 million increase, from surplus funds that would have gone to non pre-1996 teacher pensions.
HRs: $250 million permanent increase by shifting dollars from state sales tax on gasoline.
DCS
Pence: $35 million more for caseworkers, supervisors and child protection hotline.
HRs: $40 million increase.
So let me see if I get this: We’re spending more money on schools and roads. Child services is getting more money. We’re keeping a budget surplus of at least 12 percent and the big issue is whether we should cut income taxes to stimulate the economy or speed up the phase out of the inheritance tax?
I don’t know if you’ve looked at the budget problems that have been hitting other states lately but I’ll take Indiana’s budget problems any day.
...
See the full editorial here:
http://www.courierpress.com/news/2013/feb/24/indiana-can-afford-dispute-over-tax-cut/
