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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. Can your dog sign a marriage license or personally state that he wishes to join you in a legal union? If not then no, you cannot marry him. When you teach him to read, write, and speak a discernible language, then maybe you'll have a reasonable argument. Thanks for playing!

  2. Look no further than Mike Rowe, the former host of dirty jobs, who was also a classically trained singer.

  3. Current law states income taxes are paid to the county of residence not county of income source. The most likely scenario would be some alteration of the income tax distribution formula so money earned in Marion co. would go to Marion Co by residents of other counties would partially be distributed to Marion co. as opposed to now where the entirety is held by the resident's county.

  4. This is more same-old, same-old from a new generation of non-progressive 'progressives and fear mongers. One only needs to look at the economic havoc being experienced in California to understand the effect of drought on economies and people's lives. The same mindset in California turned a blind eye to the growth of population and water needs in California, defeating proposal after proposal to build reservoirs, improve water storage and delivery infrastructure...and the price now being paid for putting the demands of a raucous minority ahead of the needs of many. Some people never, never learn..

  5. I wonder if I can marry him too? Considering we are both males, wouldn't that be a same sex marriage as well? If they don't honor it, I'll scream discrimination just like all these people have....

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