Indiana Gov. Mike Pence is touting the latest state budget forecast as good news for his tax relief plan, but Republican legislators who control the purse strings aren’t ready to sign off on it yet.
House and Senate fiscal leaders said Tuesday that the April budget forecast they’ve been waiting on to finalize their two-year spending plan clears the way for about $500 million in tax cuts.
But they also said it’s unlikely that all of that will come through the permanent 10 percent cut in the income tax rate that Pence wants.
The April forecast estimates the state will bring in about $290 million more in revenue than what the December forecast — used to start the budget process — predicted. In a statement, Pence called the forecast “great news for Hoosiers” and a boost for his tax cut plan that GOP legislators have been so reluctant to embrace.
Pence’s office leaked the forecast numbers to some media outlets before they were released to the State Budget Committee and in doing, captured the early, online news headlines.
But what Pence called evidence of “greater economic growth” was characterized with much more caution by GOP fiscal leaders in the General Assembly after they’d seen the full forecast.
They pointed out the forecast predicts a significant drop in revenues from both sales taxes and gaming taxes – two significant sources of money for the state budget. And they cited an economic forecast, delivered with the budget forecast, that predicted Indiana wouldn’t see its jobless rate drop below 8 percent until next year at the earliest.
“It shows there is a little sunshine in the valley, and that’s a good sign,” said Senate Appropriations Chairman Luke Kenley of the forecast report. “I hope it’s true. It’s certainly not a robust forecast.”
Senate Tax and Policy Committee Chairman Brandt Hershman called the report “good news, served with a side of caution.”
But like Kenley, he expressed caution.
“It’s always better to have a debate over money you have rather than over money you don’t have,” Hershman said. “But we need to make sure it’s going to be money that we’re going to have.”
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