News From Terre Haute, Indiana

Local & Bistate

April 25, 2013

Legislators closing in on final budget

Bill likely to include mix of income, corporate, inheritance tax cuts

INDIANAPOLIS — In his first four months as the chief budget maker in the Indiana House, Republican Rep. Tim Brown hasn’t been surprised by the long hours, multiple demands, and intense debate that goes with crafting a $30 billion spending plan.

But he’s been surprised to be cast as something other than a fiscal conservative by his own Republican governor.

Brown, the new chairman of the House Ways and Means committee, is one of the legislative leaders that has resisted Republican Gov. Mike Pence’s demand for a 10 percent tax cut — a demand Pence was apparently still making as the legislative session nears its close.

“He feels very strongly about it,” said Brown, who’s been part of this week’s closed-door negotiations over a budget bill expected to be handed to legislators today, for a final vote Friday.

The bill is likely to include a mix of income, corporate and inheritance tax cuts worth about $500 million, but not the full 10 percent cut in the state’s income tax rate like Pence wants.

The governor believes his tax cut will stimulate spending and job growth, while legislators worry that it’s long-term impact will drain needed revenues from the state.

“As a Republican principle, I’d love to cut as many taxes as I could get my hands around, if that was the responsible thing to do,” Brown said. “But you have to do it with a balanced approach.”

While the first-term governor hasn’t backed down on what he’s called his top legislative priority, neither has the conservative advocacy group, Americans for Prosperity, an organization founded and funded by the billionaire Koch brothers of Kansas.  

The organization, headed in Indiana by a former Pence aide, ran a second round of targeted TV and radio ads over the weekend. The ads urged viewers and listeners to tell legislators to “do the right thing” and pass Pence’s 10 percent tax cut.

The ads are less aggressive than the ones the organization ran back in March that portrayed the Republicans as rejecting the Pence cut so they could “grow government spending.”

Brown said the ads caught him by surprise. Initially he dismissed them, then grew concerned about the content that he saw as distorted.

“At first I thought, ‘Everybody has the right to freedom of speech,’ ” Brown said. “Then, as I kept seeing them, I thought: ‘Oh, they’re talking about me? I’m the big spender? I didn’t really think I was big spender.’ ”

Brown said the ad campaign put some heat on legislative leaders to include a small income income tax in the final budget bill, but also created ill will.   

“Overall, it didn’t help. It made some people dig in, on both sides,” Brown said.

The final budget bill is just one of several critical issues that legislators have been working to resolve in this last full week of the 2013 session.

As of Wednesday, they were still considering legislation that would delay the state enacting the Common Core State Standards for K-12 schools until a legislative study committee could review education standards again. And they were still wrangling over a gaming bill, with hopes dimming for measures that would allow live dealers at table games at the two racinos and let riverboat casinos build land-based venues on property they currently own.

Maureen Hayden covers the Statehouse for the CNHI newspapers, the Tribune-Star’s parent company. She can be reached at maureen.hayden@indiana

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