Even during the height of last year’s gubernatorial campaign, longtime legislative leaders such as House Speaker Brian Bosma and Senate Appropriations Committee Chairman Luke Kenley expressed deep reservations about then Republican candidate Mike Pence’s proposal to cut the state income tax by 10 percent.
Why were they skeptical? Let’s put to rest any nonsense that Bosma and Kenley are anything less than fiscal conservatives. They and other Republicans in the Indiana House and Senate worked closely with former Gov. Mitch Daniels to craft honestly balanced budgets for eight years. At the same time, they championed a cap on property taxes, elimination of the inventory tax, a phasing out of the inheritance tax and even across-the-board income tax refunds for Hoosiers when surpluses reach certain levels.
All of those steps took place during economically turbulent times. It was exceedingly difficult to keep the state on a fiscally sustainable path while tax revenues tumbled and the demand for services grew as a result of rising unemployment and falling incomes.
But because of a series of fiscally prudent decisions made at the time by the Daniels administration and legislative leaders, Indiana made it through the worst of the recession without the type of devastating budget cuts and sharp tax increases inflicted on many other states. Yes, even schools eventually saw less money from the state because of declining tax revenues, but the cuts amounted to a mere 3 percent at a time when nearly every private enterprise and government agency was forced to become much more efficient.
So when a first-time candidate for governor, with no executive branch experience, made a campaign promise to cut 10 percent from one of the state’s major sources of revenue, it was understandable that the reception in the General Assembly has been for the most part chilly.