INDIANAPOLIS (AP) - The Indiana Senate approved a $30 billion budget Tuesday
night that includes new money for several highway expansions and a package
of tax cuts.
Senate Republicans crafted the plan, keeping much of the additional
education spending that House Republicans added to their budget proposal in
February. But the Senate package also includes a $150 million cut to
personal income taxes as a nod to Gov. Mike Pence, who originally wanted a
$500 million cut in the tax.
The Senate voted 38-12, with one Democrat joining all the Republicans in
supporting the plan. Differences between the plan and the House’s budget
proposal will now be worked out by a conference committee. The House plan
doesn’t include the personal income tax cut, which has been the governor’s
key agenda item.
Senate Appropriations Chairman Luke Kenley, R-Noblesville, said the budget
includes a strong balance of tax cuts to spur the economy and restoration of
budget cuts sustained through the recession.
“This is what I call an opportunity budget, this is an opportunity for
Indiana to move forward,” he said.
Lawmakers are working with $2 billion in reserves and a $500 million surplus
left by former Gov. Mitch Daniels, but they are also looking for ways to
restore cuts to education and local roads that Daniels used to help burnish
the state’s finances.
The Senate budget would devote $200 million a year to expand Indiana’s
interstate highways. The money would pay for the construction of additional
lanes on Interstate 65 and Interstate 70, as well as a further extension of
Interstate 69. The budget would also help pay for the Indiana Commerce
Connector, a new highway circling central Indiana from Martinsville east to
The Senate also proposes eliminating the inheritance tax, and cutting a tax
on banks and financial institutions by roughly $150 million.
Republican senators praised the additional tax cuts, but Democrats said the
vast majority of money would go to a small group of the state’s wealthiest
“This income tax cut as a boon to the average Hoosier is a farce,” said Sen.
Mark Stoops of Bloomington, noting that the poorest residents would get
roughly $18 a year out of the cut.
Senate Democrats offered a series of amendments Monday aimed at expanding
Medicaid, and increasing money for schools and other areas. But Republican
senators, who outnumber Democrats 37-13, easily voted down those attempts.
Pence said last week he was “pleased” with the Senate’s effort to give him
at least some of the tax cut he has sought. House Republicans stripped the
tax cut from the budget they approved in February, adding instead more money
for public schools and local roads.
House Speaker Brian Bosma, R-Indianapolis, and Pence battled through much of
the session over the tax cut. Pence’s reception of the Senate plan was much
more amenable, but he has said he would still lobby for his full tax cut.