INDIANAPOLIS – Republican legislative leaders are not embracing the income tax cut proposed by GOP Gov.-elect Mike Pence.
In their most definitive statements yet, both House Speaker Brian Bosma and Senate President Pro Tem David Long expressed caution about the idea at a Monday luncheon previewing the 2013 legislative session.
Long said the April revenue forecast will be crucial in seeing whether Indiana’s economy could handle such a cut at a time when gambling revenue is already declining rapidly and lawmakers already promised corporate and inheritance tax cuts.
Bosma was even more straightforward, noting Indiana’s tax revenue is already out of balance, with sales taxes bringing in more than half of the dollars.
That means cutting income taxes might not be sustainable in the long term, he noted.
I have expressed caution to those who think it’s time to cut our income tax because it throws us more out of balance, Bosma said.
Indiana’s next largest tax sources behind sales taxes are individual and corporate income taxes, and then gambling revenue.
One of Pence’s primary campaign pledges was to reduce income taxes across the board for individuals and small businesses. The cost would be more than $500 million a year in tax collections, of which Pence did not offer a way to replace the revenue.
Bosma said he has sat down with Pence recently but did not discuss the income tax proposal – I think on purpose.
Christy Denault, communications director for Pence, responded by email by saying, Gov.-elect Pence believes allowing Hoosiers to keep more of their hard-earned money will create jobs and looks forward to presenting his proposal for income tax relief to members of the Indiana General Assembly at an appropriate time in the future.
Other issues legislative leaders said would be big topics in 2013 include state-paid pre-school for the poorest students; transportation resources on the state and local levels; a balanced two-year budget; K-12 education spending and decisions related to the implementation of the federal health care act.
The session kicks off ceremonially today and lawmakers will return Jan. 7 to get down to work.