Pence’s potential income tax cut buster: Transportation

Gov. Mike Pence’s budget – the major focus of his State of the State address Tuesday night – would pump state dollars into transportation and infrastructure only after Indiana’s surplus tops 12.5 percent of what it spends in a year.

Pence’s budget team estimates that would be worth $347 million over the next two years, but state legislative leaders said they’re more likely to deal with transportation funding in the actual budget, rather than through a trigger mechanism using the surplus.

Pence’s proposal “gives me a bit of pause,” said House Speaker Brian Bosma, R-Indianapolis. “Many of us that have been through this for a while see that we have larger needs than just to rely on a surplus. … Personally, I hesitate to just rely on expected reserves on that because it relies on economic growth.”

Senate President Pro Tem David Long, R-Fort Wayne, said he is similarly wary about Pence’s transportation funding plan.

“We need to find a permanent, sustainable course,” Long said. “I’d like to see a more permanent source for that funding if we can find it.”

Bosma added: “You can’t declare yourself the Crossroads of America without investing in transportation and infrastructure.”

Pence is pushing hard for a 10 percent cut in Indiana’s individual income tax rate. While lawmakers have said they desire to fund education at a higher level than the governor is proposing, transportation funding could be its most significant obstacle.

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