Gov. Mike Pence is calling on the Indiana General Assembly to increase spending on education, roads and job development while ending a $1 billion-a-year tax on business that funds local governments, schools and libraries.
At a conference Thursday, the Republican Pence said he wants to expand the state’s school voucher program to include pre-kindergarten for low-income children and use $400 million in road funds to widen crowded major highways. At the same time, he wants to end the personal property tax on Indiana businesses, calling it a disincentive to investment.
“I truly do believe that by phasing out the business personal property tax in the state of Indiana, we will ensure that Indiana remains at the very forefront at the competition to attract new investment and jobs — new investment by businesses that are here and new investment by businesses with which we compete,” he said.
A proposal to repeal the tax has met with resistance from local leaders who fear losing revenue will force them to cut services or raise local taxes. While providing no specifics, Pence moved to assuage those fears.
“It is essential as we move into this debate that we ensure that this reform does not unduly harm our local governments’ abilities to meet their obligations,” he said. “As governor, my pledge in phasing this tax out is just that.”
Pence’s wish list for the 2014 session may be a tough one for legislators to fill. It’s a “short” session in a non-budget making year and must, by law, by done by mid-March. Rep. Tim Brown, the Republican chairman of the House Ways and Means Committee, has already said the budget process won’t be reopened during the session.
But Pence called on legislators to act boldly to keep up what he said is positive momentum.
“We’ve seen unemployment drop in the state of Indiana,” Pence said, referring to October’s 7.6 percent jobless rate, the lowest in five years. “More than 21,000 jobs have been added since we took office in the last 10 months. So continuing to promote policies that will encourage investment and jobs will also impact the resources that the state of Indiana has.”
Pence noted that Indiana currently spends no state dollars on pre-kindergarten. He wants to change that by expanding the state’s current school voucher program to allow low-income families to send children to a private preschool or a public school that charges for pre-school programs.
A similar measure proposed by House Republicans last year was killed when it reached the GOP-controlled Senate, where opponents said early childhood education should be the duty of parents.
Pence called the issue critical.
“I’m someone who really does believe that, at the end of the day, the best pre-K is always going to be a prosperous family that’s able to provide the kind of enrichment in their home that every child needs and deserves,” he said. “The reality is, for many of our most vulnerable kids, that’s not the case.”
Pence made little mention of the most contentious issue facing the General Assembly — a constitutional ban on same-sex marriage — though he acknowledged it as a “divisive issue.”
“My position on this has been clear all along. I believe in traditional marriage,” he said.
But Pence said he also wants to expand the conversation about family to include reducing the state’s high infant mortality rate, expanding services to military families and supporting alternatives to prison.
He also wants to increase state tax deductions that individuals can take for themselves and their children. Exemptions that were put in place decades ago — $1,000 for an individual and $1,500 for a child — haven’t kept pace with inflation, he said.
“I think the time has come to strengthen the economic foundation of the Indiana family by responding accordingly,” he said.
Pence’s goals were met with mixed reviews by Democrats in the minority at the Statehouse. In a statement, House Minority Leader Scott Pelath said Pence failed to offer “a striking vision of where Indiana needs to go.”
Pelath also questioned how Pence would get fellow Republicans to support more spending that would cut into the state’s $2 billion surplus. And he called the proposal to eliminate the business personal property tax a “corporate giveaway.”
“It’s not all bad,” Pelath said of Pence’s agenda. “But our state has many problems that this agenda ignores.”
Maureen Hayden covers the Statehouse for CNHI, the Tribune-Star’s parent company. She can be reached at maureen.hayden@indianamedia