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Bosma sees peril for Pence tax cut

House GOP budget favors more for schools, highways

– Republican House Speaker Brian Bosma on Thursday said the budget advanced by his caucus will spend more on K-12 schools, higher education and transportation than Gov. Mike Pence recommends.

That leaves a question about whether more spending means no income tax cut for the new governor, which was a major campaign pledge.

“It may be difficult to invest in all the critical needs that we have before us and still accept the governor’s tax cut proposal,” Bosma said.

Pence is seeking a cut that would cost the state $521 million in tax revenue when fully implemented in the second year.

To afford that, his budget gave only minimal increases to K-12 schools and higher education.

Bosma said both levels of education will receive more, saying that he and other lawmakers were here when both took dramatic cuts and it’s time to reinvest.

He also confirmed one avenue House Republicans will take to try to spread more dollars to state and local infrastructure. Bosma said the legislature will stop using gas tax dollars to pay for some spending by the Indiana State Police and Bureau of Motor Vehicles. Instead, general fund dollars will be used, which frees up $120 million in gas tax revenue for transportation needs.

But that doesn’t even cover an additional $200 million a year the Indiana Department of Transportation says it needs to maintain existing roads.

Both state and locals are dealing with less money as fuel efficiency cuts into gas tax receipts. This year is also the first time since 2006 legislators don’t have money from the Indiana Toll Road lease to rely on.

That money, except for a trust fund, is all spent or allocated.

Pence’s budget created a transportation fund from surplus dollars if there are any at the end of the budget. But Bosma said that relies too heavily on the economy.

Other options include increasing registration fees, gas taxes or diverting money collected from sales tax on gasoline purchases.

Bosma said it is also possible that the House budget will dip into the state’s reserves.

“We have quite a bit in the savings account,” he said. “And we have critical needs that have been postponed. There may be appropriate reasons to dip into those reserves, particularly for one-time expenditures.”

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