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Pence sees hope for tax cut in better budget forecast

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A sunny budget picture unveiled to state lawmakers Tuesday virtually guaranteed Gov. Mike Pence will get at least a piece of the $500 million cut to the personal income tax he has been seeking.

House and Senate budget leaders said they plan on approving a $500 million package of tax cuts as part of the biennial budget, but how much each cut will comprise has yet to be determined. The news came as state revenue forecasters released new estimates that the state will collect $290 million more than expected in the coming years.

Pence's staff believes the additional money expected to roll in shows that the state can approve a tax cut.

A slowly improving economy contributed to the more optimistic estimate, even as proceeds from the state's gambling industry decline amid new competition across state borders. All of which comes as good news for Pence, the freshman governor, who has struggled to win support for his tax cut.

House Ways and Means Chairman Tim Brown, R-Crawfordsville, said he sees cuts to the personal income tax, corporate income tax, inheritance tax and financial institutions tax all being included in the final budget. The Senate budget proposed the immediate elimination of the inheritance tax, the cut in the financial institutions tax and a $150 million, or 3 percent, cut to the personal income tax.

"We'll continue to have those discussions, again we're still analyzing how those two documents will fit together," Brown said.

The House approved budget calls for roughly $500 million in new roads spending, in addition to the restoration of $331 million in education spending. The Senate approved a similar budget that instead calls for $400 million to invest in a highway expansion plan, $500 million in a series of tax cuts and the additional education money the House approved.

House and Senate negotiators plan to meet Wednesday to begin work on a compromise.

What exactly counts as a "cut" has become a battle of semantics for House lawmakers and the Pence administration. Brown said there will be no additional corporate tax cuts, beyond the phase-in of the 2-percent cut lawmakers already approved. But Pence and his supporters previously said the budget needed to include "new" tax cuts.

Talk of any cut to the income tax marks a minor victory for Pence, from where things stood just a month ago, when House leaders were openly scrapping with the governor. But Pence's staff say they're not ready to give in on the full tax cut just yet.

"We haven't gotten to the point of what we're willing to accept yet," Budget Director Chris Atkins said. "I certainly think this means we can do road and school funding somewhere closer to the House and Senate versions of the budget, alongside our proposed income tax relief."

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  1. In reality, Lilly is maintaining profit by cutting costs such as Indiana/US citizen IT workers by a significant amount with their Tata Indian consulting connection, increasing Indian H1B's at Lillys Indiana locations significantly and offshoring to India high paying Indiana jobs to cut costs and increase profit at the expense of U.S. workers.

  2. I think perhaps there is legal precedence here in that the laws were intended for family farms, not pig processing plants on a huge scale. There has to be a way to squash this judges judgment and overrule her dumb judgement. Perhaps she should be required to live in one of those neighbors houses for a month next to the farm to see how she likes it. She is there to protect the people, not the corporations.

  3. http://www.omafra.gov.on.ca/english/engineer/facts/03-111.htm Corporate farms are not farms, they are indeed factories on a huge scale. The amount of waste and unhealthy smells are environmentally unsafe. If they want to do this, they should be forced to buy a boundary around their farm at a premium price to the homeowners and landowners that have to eat, sleep, and live in a cesspool of pig smells. Imagine living in a house that smells like a restroom all the time. Does the state really believe they should take the side of these corporate farms and not protect Indiana citizens. Perhaps justifiable they should force all the management of the farms to live on the farm itself and not live probably far away from there. Would be interesting to investigate the housing locations of those working at and managing the corporate farms.

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