INDIANAPOLIS (AP) — Republican gubernatorial candidate Mike Pence proposed a
fiscal plan Tuesday which would cut income taxes while locking in tight
spending levels set by Gov. Mitch Daniels and state lawmakers during the
Pence estimates the measure would cost the state roughly $533 million a year
and eat up much of an assumed cash surplus over the next two years. Pence
added that the additional money from the surplus should be banked in the
“I think the next governor of Indiana has to say no to government and yes to
taxpayers,” Pence said Tuesday, after detailing his proposal in a speech to
the Indianapolis Chamber of Commerce.
Tax cuts have long been talked about in the governor’s race. Democrat John
Gregg’s first detailed proposal, released in April, called for eliminating
the state’s sales tax on gasoline, which is levied in addition to the
state’s gas tax. Gregg later called for eliminating the corporate income tax
on businesses physically headquartered in Indiana.
“We’ve been talking about tax cuts for months so we’re happy to see the
congressman has joined us,” Gregg said on a conference call with reporters
Earlier in the day, Gregg said he would promote equal pay for women by
honoring businesses that pay equally with a designation from the state,
create new opportunities for those businesses and establish a hotline to
report suspected pay discrimination.
Libertarian candidate Rupert Boneham plans to release his tax plan “in the
coming weeks,” said campaign manager Evan McMahon.
“Rupert’s plan will do more than save the average Hoosier worker $2-4 a
week, Pence’s plan won’t even get you a weekly $5 foot-long (sandwich) for
lunch,” McMahon said.
Any of the candidates’ proposals to cut taxes next year would build off of
the state’s cash reserves, estimated at $2.2 billion, and an expected
surplus of roughly $500 million a year. The state already returns a certain
portion of cash reserves to taxpayers and to the state teacher pension fund
to pay down unfunded liabilities, but Pence’s plan would overtake both those
Conservative governors in Oklahoma and Kansas have struggled to push more
income tax cuts through their statehouses. Oklahoma Gov. Mary Fallin
attempted without success to eliminate the state’s income tax, while Kansas
Gov. Sam Brownback won a rollback of the income tax but could not find the
votes to approve the series of tax maneuvers he said would pay for the cut.
Additional pressure will be on Indiana lawmakers to restore education cuts
made during the recession to the next biennial budget and find new ways to
pay for transportation projects as money from Daniels’ leasing of the
Indiana Toll Road dwindles.
“Clearly, we’ve got a problem of funding our transportation maintenance
budget. And Indiana being the crossroads of America, that’s a pretty
critical thing to keep funded,” said Senate budget leader Luke Kenley,
Kenley questioned the Pence campaign’s estimate that the state will continue
to see a budget surplus over the next few years. He noted that surpluses and
deficits are fleeting and can disappear depending on how the economy
The Pence campaign built its estimates assuming Indiana’s tax collections
improve by 2.5 percent each year, while they assume spending would increase
by 1.5 percent annually.
State budget leaders are scheduled in December to get a set of new economic
forecasts, which will be the starting point for writing Indiana’s next