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Senate budget pushes highway expansion, small tax cuts

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Indiana lawmakers and Gov. Mike Pence drew closer to a budget compromise Thursday with the unveiling of a $30 billion Senate plan that cuts the state income tax by $150 million and establishes a new roads fund.

The Senate budget would keep much of the education spending House lawmakers wrote into the budget in February, but has sizable overhauls elsewhere — paying for an expansive statewide highway plan, curbing teacher pension debt and cutting a handful of taxes.

In adding at least a modest tax cut, Senate Republicans extended a hand to Pence, who has spent much of the last few months publicly and privately battling with House Republicans. Pence is pushing to cut the tax from 3.4 percent to 3.06 percent; the Senate budget lowers the tax to 3.3 percent.

"I am pleased with the latest version of the budget. I think we are getting on the same page but there are still details and differences in levels and priorities, and I believe those will be the subject of vigorous and respectful negotiations in the days to come," the governor said Thursday.

Senate Republicans proposed — on top of the personal income tax cut — decreasing the state's financial institutions tax by 2 percentage points and eliminating the inheritance tax, a measure already being slowly phased out.

"What we have is a mix of tax cuts, and I think we're more comfortable in the Senate with that broader package," said Senate President Pro Tem David Long, R-Fort Wayne.

Senate Democrats quickly pointed out that the income tax cut might sound large, but would work out to a savings of roughly a dollar a week for most residents.

"If it weren't so serious it would be a joke," said Sen. Lindel Hume, D-Princeton. "To have this reduction from 3.4 to 3.3 percent. I just feel most of the people in this state could care less about that dollar a week, we seriously need that money to fund this state."

Much of the budget debate this session has centered on how Indiana would use $2 billion in cash reserves and a roughly $500 million surplus. Pence submitted a budget in January that spent the vast majority of it on a 10-percent tax cut. But local leaders and school advocates pushed hard for the restoration of budget cuts that former Republican Gov. Mitch Daniels used to help build the state's coffers.

Senate Republicans' budget keeps a similar level of spending as laid out by House Republicans, but shifted spending in significant ways. Most noticeable: A plan that would put $200 million a year into a transportation fund dedicated to expanding Indiana's interstates.

IBJ reported Wednesday that Senate leaders were expected to push for more road-construction spending.

The money would be used to finance expansion of Interstate 65 and Interstate 70 to six lanes statewide and pay for another leg of the Interstate 69 extension. It would also pay for the Indiana Commerce Connector, an outer beltway which would stretch around central Indiana from Muncie to Martinsville.

There's no set timetable for when the lanes would be added or when work would begin on the commerce connector, Senate Appropriations Chairman Luke Kenley, R-Noblesville, said.

"If you don't make the commitment now, it will never happen," Kenley said.

The Senate plan also spends roughly $100 million more to pay down pension liabilities, including pension payments to teachers hired before 1996, a line item which could cost the state upward of $1 billion a year in a few years. Daniels dismissed the problem through his eight-year tenure, but lawmakers, including Kenley, pushed to invest more in the state's teacher pension stabilization fund.

The Senate also will require counties that don’t already have a wheel tax to adopt one before they can receive additional money. Most of Indiana’s urban and suburban counties charge a wheel tax.

The Appropriations Committee advanced the budget on a 9-4 party line vote Thursday. The budget now moves to the Senate and later will be hashed out in a conference committee with House negotiators.

House Ways and Means Chairman Tim Brown, R-Crawfordsville, said it was still too early to say exactly what the final product will look like, but it would be safe to bet on some tax cuts.

"I think very strongly there will, as this framework shows and our framework shows, there will be tax cuts. It's which tax cuts should be targeted and what's the impact" that must be decided, he said.

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  • Dinosaur hypocrite
    Kenley says if we don't expand and build new roads now, it'll never happen. But he says we're not ready to move forward on even allowing Marion & Hamilton counties to decide if they want to spend their own money on expanded transit. This is the type of leadership that keeps the brain drain moving at full speed.
  • Tax Reduction
    The proposed tax deduction, even the one proposed by Pence, is so pitiful as to be laughable. It will benefit the "wealthy" the most, not us middle class and poorer. Why not apply extra revenue to the pension fund!
  • Study it more
    The transportation funding obviously needs more study and should be put on the shelf...er, sent to a summer study committee...before that amount of money is committed. There are long-term concerns about the ability of the roads to pay for themselves once built. (Oh, wait. That only applies to PUBLIC transportation, not PUBLIC roads.)
  • Joke?
    Are you kidding me?!?! It has been noted by all political parties that we are in some kind of hole with our current roads and bridges and the state decides now is a good time to allocate additional funds for new highways and new lanes?!?! WAKE UP! Road building is a continuous hobby for the politically connected lobbyists. I still don't remember voting for this? $200 mil a year for highways. I guess we are much better off than we thought. Incomes are up, everyone loves taxes......YAY INDIANA!

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  1. If what you stated is true, then this article is entirely inaccurate. "State sells bonds" is same as "State borrows money". Supposedly the company will "pay for them". But since we are paying the company, we are still paying for this road with borrowed money, even though the state has $2 billion in the bank.

  2. Andrew hit the nail on the head. AMTRAK provides terrible service and that is why the state has found a contractor to improve the service. More trips, on-time performance, better times, cleanliness and adequate or better restrooms. WI-FI and food service will also be provided. Transit from outlying areas will also be provided. I wouldn't take it the way it is but with the above services and marketing of the service,ridership will improve and more folks will explore Indy and may even want to move here.

  3. They could take the property using eminent domain and save money by not paying the church or building a soccer field and a new driveway. Ctrwd has monthly meetings open to all customers of the district. The meetings are listed and if the customers really cared that much they would show. Ctrwd works hard in every way they can to make sure the customer is put first. Overflows damage the surrounding environment and cost a lot of money every year. There have been many upgrades done through the years to help not send flow to Carmel. Even with the upgrades ctrwd cannot always keep up. I understand how a storage tank could be an eye sore, but has anyone thought to look at other lift stations or storage tanks. Most lift stations are right in the middle of neighborhoods. Some close to schools and soccer fields, and some right in back yards, or at least next to a back yard. We all have to work together to come up with a proper solution. The proposed solution by ctrwd is the best one offered so far.

  4. Fox has comments from several people that seem to have some inside information. I would refer to their website. Changed my whole opionion of this story.

  5. This place is great! I'm piggy backing and saying the Cobb salad is great. But the ribs are awesome. $6.49 for ribs and 2 sides?! They're delicious. If you work downtown, head over there.

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