INDIANAPOLIS – House Republicans used a technical maneuver Thursday to avoid a vote on an income tax cut supported by Gov. Mike Pence.
House Democrats included the income tax cut as an amendment during discussion of the state budget.
Gov. Mike Pence has proposed dropping the state income tax from 3.4 percent to 3.06 percent over the next two years. The proposal would save Hoosiers more than $500 million a year.
House Republicans have resisted the cut – wanting to spend that money on K-12 education and transportation.
It’s one of the best ideas that’s been expressed from the second floor, said House Democrat Leader Scott Pelath of Michigan City. We need to have a vote on Gov. Pence’s signature item.
House Republicans objected to the Democratic amendment containing Pence’s proposal under a procedural rule that doesn’t allow amendments to duplicate a bill that was filed. That separate bill was spiked by House leadership in the Ways and Means Committee.
Pelath tried to appeal the ruling of House Speaker Brian Bosma, imploring the members that a tax cut was more important than a rule.
Rep. Gerald Torr, R-Carmel, said the chamber follows the rules and you may very well get an opportunity to vote on the tax cut the governor is proposing in April after the revenue forecast.
Several other amendments were considered with no major changes to the proposal.
The House will vote on the $30 billion GOP budget Monday.
It is highlighted by about $345 million in new K-12 funding. That translates into a 2 percent increase in the first year of the biennium and a 1 percent increase in the second year. Some school districts would still lose money because they lost enrollment.
The state’s public colleges and universities would get a 3.5 percent increase in funding over the two years, as well as additional money for capital projects.
The proposed budget also would free up $250 million a year in additional road construction funds to be split by state and local governments. A large chunk of that money comes from no longer diverting gas tax dollars to fund state agencies.
Another portion comes from dedicating a portion of the state sales tax on gasoline to roads.
Republicans propose paying for expected Medicaid growth but don’t intend to expand the program under the federal health care act and provide $40 million in additional funding each year for the Department of Child Services to protect abused and neglected kids.
Instead of Pence’s proposed income tax cut, GOP leadership in the House chose to accelerate the elimination of the estate tax. It is currently expected to phase out in 2022 and the budget would move that to 2018.
Each year of the proposed budget is structurally balanced, meaning the budget doesn’t spend more than the state is expected to take in. A $2 billion surplus is left at the end of the biennium, but it doesn’t trigger the automatic taxpayer refund because of slight tweaks in the formula.