Lawmakers override one of Gov. Mike Pence's three vetoes

Force bill into law with series of tax changes

INDIANAPOLIS - Indiana lawmakers made an unprecedented one-day visit to the Statehouse on Wednesday to override one of Gov. Mike Pence’s three vetoes.

The House and Senate each voted to trump the governor and force into law a bill that includes a series of minor tax changes – including the retroactive approval of local income taxes collected in Jackson and Pulaski counties.

The bill drew next to no attention during the General Assembly’s four-month, budget-writing 2013 session, as lawmakers said the measure simply corrected mistakes. Pence elevated it, though, using his veto power and calling it a tax hike.

That led the Republican-dominated House and Senate to return – for the first time ever – on their “technical correction day,” which is reserved for cleaning up grammatical mistakes in laws they’ve just passed, for a veto override vote. It was a “somewhat historic event,” said House Speaker Brian Bosma, R-Indianapolis.

The House voted 68-23 and the Senate voted 34-12 to override Pence’s veto. Republicans largely broke with Pence and sided with their legislative leaders, while Democrats, all of whom voted for the bill initially, said Pence had a fair point.

“In the day-to-day administration of government, sometimes you have to make judgment calls that are not entirely clear-cut,” said Senate Tax and Fiscal Policy Chairman Brandt Hershman, R-Lafayette, who shepherded bill through the Senate.

Both House and Senate leaders said their votes were not intentional efforts to rebuke the governor.

Still, the state leaves its legislature the upper hand by giving the governor severely limited veto power. Unlike the supermajorities required in some other states, it takes just a simple majority of the House and Senate – in other words, a recasting of the same vote that passed the bill in the first place – to override a veto in Indiana.

But using the “technical correction day” to do it was a first.

Rep. B. Patrick Bauer, D-South Bend, said if he’d understood the issues Pence raised during the session, he’d have voted against the bill.

He said it’s “a bill fraught with errors, and condoning the unlawful collection of taxes is a terrible precedent.”
Republicans, some of whom have taken the Americans for Tax Reform’s pledge not to raise taxes, insisted that the bill doesn’t amount to a tax increase, since other provisions would save taxpayers money overall.

The local income taxes in Jackson and Pulaski counties were initially instated to pay for jails in those counties.

However, the taxes included automatic sunset provisions. They lapsed, and local officials – through what they attribute to simple oversight – never reinstated them. The counties kept collecting them, though, and it ultimately amounted to $6 million in non-existent taxes.

How the problem went unnoticed is not yet clear.

County officials say they were unaware of it for years. The Indiana Department of Revenue did not catch it, nor did Deloitte, which conducted an outside audit of the agency last year after other errors, much larger in scale, were discovered under former Gov. Mitch Daniels. And the State Board of Accounts did not notice the problem in its audits of those counties.

Sen. Brent Steele, the Bedford Republican who represents Jackson County, said he’s never heard a complaint about the tax and that retroactively approving it is “the least painful way to correct the error.”

However, Pence’s administration said it could instead reimburse taxpayers by slightly reducing the amount of income tax dollars that are distributed to those counties in the coming years – a move that Pence said would minimize the pain.

The governor was disappointed by Wednesday’s vote, his office said.

“Gov. Pence stands by his veto, and regrets that it was not upheld by the Indiana General Assembly today,” said Pence’s communications director, Christy Denault.

“While this bill contained some positive provisions, the governor believes that when Hoosiers pay taxes that are not owed, they should be offered relief. Hoosiers can be assured that Gov. Pence and his administration will continue to put taxpayers first.”

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