The Indiana Senate today restored Gov. Mike Pence’s proposed income tax cut to the state budget - sort of.
Sen. Luke Kenley, R-Noblesville, proposed a budget today that cuts individual income taxes by 3 percent, short of the 10 percent proposed by the governor.
For months, Pence been at odds with lawmakers over his proposed 10 percent cut to the income tax rate
. House Republicans left it out of their budget proposal entirely.
. House Republicans left it out of their budget proposal entirely.
Kenley said the Senate’s version would return $150 million per year to taxpayers. He also proposed to eliminate the state’s inheritance tax retroactive to Jan. 1, equal to about $150 million per year. Coupled with the current reduction in the corporate income tax -- approved last year -- and a reduction in the financial institutions tax, Kenley estimates total tax relief at $500 million annually.
institutions tax, Kenley estimates total tax relief at $500 million annually.
That’s about the same total tax relief as proposed by the governor, though his was all through the income tax reduction.
The Senate budget also keeps both K-12 education funding and higher education funding at about the same levels as in the House’s version of the budget. K-12 tuition support would rise by about $331 million over current levels. It also sets aside $25 million for schools that perform well on tests and have high graduation rates.
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The Senate reduces the current transportation funding the House had proposed, as well as debt funding. However, Kenley proposes to set aside $200 million per year through 2020 to fund major road projects such as widening I-65 and I-70 to six lanes through the state, working on a commerce connector -- a sort of outer loop to I-465 that could link Muncie, the airport and Martinsville -- and would finish I-69.
Kenley said those are broad plans and details would need to be hashed out for construction plans and timelines. He was unsure exactly how a commerce connect might be built.
plans and timelines. He was unsure exactly how a commerce connect might be built.
Kenley said the Senate’s plan was merely a way to get the conversation started about those transportation needs.
The Senate also will fund nearly $1 billion over two years for health care, which he said could be for an expansion of Medicaid through the Healthy Indiana Plan or current Medicaid needs. That money comes from excess Medicaid revenues, excess Healthy Indiana Plan revenues and cigarette tax funds.
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