Now, the hard work begins as Republicans in the Indiana House, Senate and Gov. Mike Pence’s office try to hash out the differences between the three budgets they have proposed.
The state Senate finished its work on a new two-year, $30 billion budget late Tuesday, approving a plan crafted by Senate Appropriations Committee Chairman Luke Kenley, R-Noblesville, on a 38-12 vote, with one Democrat joining the 37 Republicans.
That vote meant the start of joint House-Senate “conference committee” negotiations. Key fiscal legislative leaders and the governor’s lobbyists will work to hammer out a deal that both chambers deem acceptable and can approve by the April 29 deadline to adjourn this year’s session.
Both chambers already agree on some key points — such as funding for K-12 education, the largest item in Indiana’s spending plans. They boost school funding by 2 percent in the new budget’s first year and another 1 percent in its second year, although the Senate ties some of those second-year funding increases to schools’ performance.
But they differ in some key areas — most prominently, taxes.
Politically, the final budget deliberations will be a crucial test of Pence’s influence over a General Assembly that his own party dominates.
The question is whether the governor will get what he wants most: A reduction in Indiana’s individual income tax from its current 3.4 percent rate to 3.06 percent. That would save the average Hoosier about $100 a year and cost the state $520 million in annual revenue.
The House, though, declined the governor’s request, keeping the state’s income tax at its current rate as Speaker Brian Bosma, R-Indianapolis, raised concerns that failing to do so could create a budgetary situation that is not “sustainable.”
The Senate, meanwhile, gave Pence just a part of what he wanted. The Senate’s budget lowered the income tax rate from 3.4 percent to 3.3 percent.
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