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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. PJ - Mall operators like Simon, and most developers/ land owners, establish individual legal entities for each property to avoid having a problem location sink the ship, or simply structure the note to exclude anything but the property acting as collateral. Usually both. The big banks that lend are big boys that know the risks and aren't mad at Simon for forking over the deed and walking away.

  2. Do any of the East side residence think that Macy, JC Penny's and the other national tenants would have letft the mall if they were making money?? I have read several post about how Simon neglected the property but it sounds like the Eastsiders stopped shopping at the mall even when it was full with all of the national retailers that you want to come back to the mall. I used to work at the Dick's at Washington Square and I know for a fact it's the worst performing Dick's in the Indianapolis market. You better start shopping there before it closes also.

  3. How can any company that has the cash and other assets be allowed to simply foreclose and not pay the debt? Simon, pay the debt and sell the property yourself. Don't just stiff the bank with the loan and require them to find a buyer.

  4. If you only knew....

  5. The proposal is structured in such a way that a private company (who has competitors in the marketplace) has struck a deal to get "financing" through utility ratepayers via IPL. Competitors to BlueIndy are at disadvantage now. The story isn't "how green can we be" but how creative "financing" through captive ratepayers benefits a company whose proposal should sink or float in the competitive marketplace without customer funding. If it was a great idea there would be financing available. IBJ needs to be doing a story on the utility ratemaking piece of this (which is pretty complicated) but instead it suggests that folks are whining about paying for being green.

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