INDIANAPOLIS - Majority Republicans blocked a vote on Gov. Mike Pence’s plan to cut Indiana’s individual income tax rate Thursday, saying they’d instead take it up as they finalize the state’s next budget in April.
Serving as an odd political ally for the new Republican governor, Democrats raised the issue. They argued that Pence deserves a vote on his signature legislative initiative – lowering the income tax rate from 3.4 percent to 3.06 percent.
Rep. Terry Goodin, D-Crothersville, sought to amend the tax cut into the House Republicans’ two-year, $30 billion budget proposal, which Pence has repeatedly said he was “very disappointed” did not include it.
“It’s a great proposal as we move forward,” Goodin said. “Gov. Pence has notified the newspapers several times – you folks have read this – that he was disappointed in the fact that this tax cut was not in the House version of the budget bill. I am one person who does not like to see the governor be disappointed.”
But House Speaker Brian Bosma, R-Indianapolis, cited a parliamentary rule and called the Democratic amendment out of order. Then, the House voted on party lines to uphold Bosma’s decision.
Rep. Jerry Torr, R-Carmel – the House’s rules chairman – initially raised the procedural objection to Goodin’s amendment.
He said Pence’s tax cut is contained in a separate bill, which was assigned to the House Ways and Means Committee but did not receive a vote before the deadline for committees to advance legislation on to the full chamber.
Therefore, it is a “bill pending” – which means the House’s rules prevent lawmakers from offering identical language as an amendment to a separate bill.
The House then voted on whether to block a vote on Goodin’s amendment as a result of the “bill pending” rule.
Torr said the vote was “on our rules and whether we follow those rules,” while House Minority Leader Scott Pelath, D-Michigan City, said giving Pence’s tax cut an up-or-down vote was “more important” than those rules. He said it’s the “sole reason” Pence was elected.
Torr then said such a vote could happen in April, after lawmakers receive their final forecast on how much the state will collect in tax dollars over the next two years – and, therefore, how much they can spend in the budget.
“You may very well get a chance to vote on that tax cut the governor has proposed in April, after the April revenue forecast,” Torr said.
Pence’s tax cut, which he has proposed phasing in over two years, would save average Hoosiers around $100 per year once it’s fully implemented.
Republicans such as Bosma have said they aren’t sure Indiana can afford it. The House is advancing a budget that drops the tax cut in favor of K-12 education spending increases of 2 percent in its first year and another 1 percent in its second year, plus $250 million more in annual transportation funding.
The Senate’s chief budget writer, Appropriations Committee Chairman Luke Kenley, R-Noblesville, has said the state should consider speeding up tax cuts already in the works – including phasing out the inheritance tax, which is currently set to happen by 2022, and stepping the corporate income tax rate from 8.5 percent down to 6.5 percent.
Pence, meanwhile, has held meetings with lawmakers during his first weeks in office and has pledged to continue lobbying the General Assembly for the tax cut.
“I am very disappointed in the House budget proposal. Despite having the largest budget surplus in history, this House budget increases spending without giving hardworking Hoosiers one cent of new tax relief,” Pence said last week.
“As our administration's budget clearly showed, we can afford to do both. Indiana can fund our priorities including increases for roads and schools and reduce the personal income tax. Since we can reduce taxes on every Hoosier, we should.”