By TOM LoBIANCO
INDIANAPOLIS (AP) â¿¿ A pair of Republican senators argued Tuesday for the personal income tax cut that Indiana Gov. Mike Pence has made his top priority, while House Republicans across the hall advanced a budget that swaps that cut for education and roads spending.
The House Ways and Means Committee voted 16-7 along party lines to send a $30 billion budget to the House of Representatives. The Senate Tax and Fiscal Policy Committee, meanwhile, vetted Pence's proposal to cut the income tax by 10 percent, but declined to vote on it.
At the center of the debate is how lawmakers will spend a roughly $500 million annual surplus left by former Gov. Mitch Daniels.
Pence campaigned heavily on the tax cut, which would cost roughly $500 million a year once phased in. House Republicans, led by Speaker Brian Bosma, have said the state needs to restore funding cut during the recession. Democratic lawmakers have pointed out that Daniels left the state with many debts, including a $2 billion unemployment insurance loan from the federal government.
"We would unleash half a billion dollars into the economy. Our taxpayers can make wiser economic decisions than the government can," said Sen. Mike Delph, R-Carmel, lead author of the Pence measure in the Senate.
But skeptical budget leaders in the House and Senate have either dismissed the cut, or have been slow to embrace it, saying they would like to wait until they get new tax collection forecasts in April before signing off on the measure.
Senate Tax and Fiscal Policy Chairman Brandt Hershman, R-Buck Creek, asked Delph and the author of a similar tax cut, Sen. Jim Buck, R-Kokomo, if the state was being forced to cut because the federal government is allowing taxes to increase.
"The question is: 'Are we doing so at a cost to our own state services because the federal government can't get its act together?'" asked Hershman.