INDIANAPOLIS — Gov. Mike Pence always knew on an intellectual level that Mitch Daniels would be a tough act to follow. His first nine weeks in office, he is finding out just what that means in practice.
From the outset, Pence understood his fellow Republican’s legacy. Daniels had turned Indiana’s budget deficit into a hulking surplus and reformed the state’s government at lightning speed, allowing him to depart for Purdue University as a popular and powerful figure.
Pence also grasped the internal party politics. He called his predecessor “the best governor in America” and was careful not to risk alienating the operatives, lawmakers and business officials who helped Daniels along the way by criticizing the work they had done.
What Pence might not have fully known at his campaign’s outset is that along with what Republicans consider a lot of good, Daniels left behind, as the old movie title goes, the bad and the ugly.
It’s that the cost of Daniels’ accomplishments that now threatens to derail the top item on Pence’s first-year legislative agenda.
Citing Indiana’s surplus, the new governor wants to lower the state’s individual income tax rate from 3.4 percent to 3.06 percent a move that would save average taxpayers a little less than $100 per year and cost the state $520 million in annual tax revenue.
The old governor, though, built that surplus by making tough decisions through the economic downturn. Public schools still get less funding today than they did in 2009, and state and local officials who manage transportation budgets are desperate for extra cash, especially now that Daniels’ signature “Major Moves” program is ending.
Pointing to his own budget proposal, Pence likes to tell groups he addresses that Indiana can afford to both fund its priorities and cut taxes. That budget includes marginal education spending increases, though not enough to keep up with the cost of living, and a conditional bump in roads funding.
No one who’s paid attention to the state’s finances is taking Pence’s argument seriously, though, because they see his budget as a half-hearted effort to actually fund those priorities. Nor are they swayed by Pence’s Washington, D.C.-style argument that increasing spending in those areas amounts to growing the size of Indiana’s government.
Pence’s problems were on clear display last week during his speech in front of a Statehouse gathering of Indiana Association of Cities and Towns members.
“I’m advocating we lower the income tax across the board by 10 percent for every Hoosier in the city and on the farm, on a permanent basis,” Pence said.
He paused and looked up as if he expected applause, but was met with silence.
“And I know we might have some disagreement on this from some in this organization,” he said adding, as one person clapped, “apparently not all.”
This all helps to explain why the word “context” has been uttered so frequently by House Speaker Brian Bosma, the Indianapolis Republican who has balked at Pence’s tax cut proposal and favors more funding for schools and roads and pumping $197 million into retiring some of the state’s debt proposals for which he’s been blasted by the Koch brothers-funded Americans for Prosperity in television and radio advertisements.
Lawmakers spent eight years in Daniels’ shadow, giving the former governor much of what he wanted and then going home on weekends to complaints that their local schools were strapped for cash and their municipal-level friends were taking it on the chin. Those lawmakers’ desire to reassert their authority, combined with Pence’s failure to top 50 percent in last year’s gubernatorial election, gives the new governor nowhere near the clout that his predecessor had when he left.
Now, Bosma is asking Pence to make a more serious case “that a rather small income tax cut would have a profound positive effect on our state’s economy, as he’s asserted a few times,” the speaker said last week.
As Pence finds his footing in the governor’s office, time will pass and legislative leaders will look for ways to help their own party’s governor secure some political victories. In the meantime, it’s those unmet needs and lingering struggles from his predecessor’s era that will cause the new governor trouble.