Pence submits lean budget built around tax cut

Gov. Pence
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Updated: .

Gov. Mike Pence is asking lawmakers to spend most of Indiana's cash surplus on a 10 percent cut in the personal income tax.

The new Republican governor has cash in the bank and a roughly $500 million surplus to work with, courtesy of former Gov. Mitch Daniels. But he also has many demands from lawmakers in both parties to restore spending cuts to education, child services and other areas.

Pence Budget Director Chris Atkins submitted a two-year spending plan Tuesday with a modest increase for the embattled Department of Child Services and 1 percent more spending for education.

But the new Republican governor limits spending growth in his roughly $29 billion budget to cover the $790 million cost of the tax cut.

Pence also wants $64 million in performance grants for schools and a transportation fund paid for by diverting potential pension fund payments.

Atkins briefed members of the State Budget Committee on the governor's proposal. Republican and Democratic budget leaders on the panel had few questions for the new budget chief.

According to Pence's office, the budget:

  • doubles growth in K-12 spending
  • provides permanent funding for full-day kindergarten
  • increases teacher excellence grants by $6 million to provide pay increases for high-performing teachers
  • provides a one-percent increase in funding for public colleges and universities and $18 million over two years for adult workforce improvement funds.
  • invests $6 million over two years to bring career, technical and vocation to every high school in Indiana by creating Indiana Works Councils¬†
  • puts $3 million over the next two years into developing a partnership with Indiana's life sciences industry and its universities
  • targets over $300 million in excess reserves over the next two years and reinvests that money in Indiana's roads and infrastructure
  • reduces the personal income tax by 10 percent over the two-year budget cycle, which, according to Pence's office, will put $500 million back into the Hoosier economy
  • includes $35 million for the Department of Child Services to hire more caseworkers and expand the emergency hotline.
  • fully funds the forecast Medicaid expansion, and includes money for an assessment of Indiana school security.

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