WEST LAFAYETTE, Ind. (WLFI) - Tax cuts are back in the latest proposal of the state budget.
A Senate committee has passed a proposed two-year budget that includes a 3-percent income tax cut, in between the Governor's desired 10-percent cut and the House version, which does not have a tax cut.
The 3-percent cut means about $50 for someone who makes $50,000. But budget co-author Senator Brandt Hershman (R-7) says Indiana already has one of the lowest income tax rates in the nation.
"The cut in the (individual) income tax rate would be from 3.4 percent, which we currently pay, to 3.3 percent. While that's not a large decrease, it is a decrease at a time when most other states are raising taxes," Hershman.
But Governor Mike Pence (R) wants even more. He is asking for a 10 percent cut in in the income tax. He continues to pursue that cut but says he's happy to see an income tax cut of any size in the proposal.
"I'm pleased that this budget includes permanent income tax relief for every Hoosier," says Pence.
Aside from the income tax cut, Hershman says the budget has a lot to offer, including a $2.5 billion reserve. The Senate Appropriations Committee passed it Thursday.
"We think it's a well-balanced budget and it does so in a manner which preserves our state reserves and allows us to make investments for important things in our future like transportation and education, both K-12 and higher education," Hershman says.
The House budget proposal does not make any tax cut. Instead, it gives more money for education.
The Senate version now heads to the full Senate.
Hershman there will eventually be a conference committee to work out the differences between the House, Senate and Governor's versions of the budget.
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