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January 23, 2013

Inaugural challenges for Gov. Pence

(Continued)

If there were any doubts about the fledgling administration, they were allayed until Tuesday, when OMB Director Chris Adkins — the architect of Pence’s campaign “Roadmap” and his policy wizard — rolled out the first budget. It was there that the policy cornerstone of the Pence campaign met the realities of Statehouse sausage production and a fitful economy that has seen Indiana’s jobless rate hover in the 8 percent range for more than two years. 

The 10 percent income tax cut which Pence unveiled last July without input or the imprimatur of Speaker Bosma, Senate President David Long or Senate Appropriations Chairman Luke Kenley would serve as the $790 million thrust of the proposed $28 billion biennial budget.

School funding would increase by a tiny 1 percent and Medicaid funding could gobble up 80 percent of the $1.2 billion surplus in the first year alone. That element was creating what Pat Kiely, former Ways & Means chairman and current Indiana Manufacturers Association President, would call a “surplus mirage.”

As the Pence administration began on a cold January morning, the temperature permeated the reaction of legislative fiscal leaders with frosty pragmatism.  

“We’d like to be heroes and cut taxes,” said Kenley. “You also need to be prepared to take care of your priorities and you need to have enough money to do that.”

Said Ways & Means Chairman Tim Brown, “It is on the priority list. I don’t know where it falls right now.”

Essentially, the Pence income tax cut will be held hostage by events and statistics beyond his control until the April revenue forecast is manifest. Thus, the success of the No. 1 Pence priority will be outside of his hand for almost three months. It is a risky proposition for a politician who has aspirations for the White House, possibly as early as 2016. Thus, getting strongly out of the gates is vital in that context.

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