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Local lawmakers are taking a wait and see attitude on a proposed cut in the Indiana income tax rate.
Gov. Mike Pence campaigned on reducing the individual income tax rate by 10 percent, but leaders of the Indiana House and Senate are reluctant to implement the reduction.
Local lawmakers took part in the final Third House session sponsored by the Greater Kokomo Economic Development Alliance on Saturday at Ivy Tech Community College.
Sen. Jim Buck, R-21st District, has introduced legislation that would phase in the reduction in the tax rate by 10 percent over four years.
When asked about the proposed tax cut, Buck said lawmakers should receive the state’s revenue forecast in April.
He said the state is unsure of the cost of the Affordable Care Act costs and should have a better projection of the cost by the end of the session.
Buck said the revenue forecast will give lawmakers a better picture of the state’s fiscal picture. He said additional funding is needed for roads and infrastructure, education and the Affordable Care Act.
“It’s impossible to determine a threshold right now,” he said of a minimum revenue project in April to trigger a tax cut.
Rep. Heath VanNatter, R-38th District, said more money is needed for roads and schools.
“We have to see what the revenue forecast is,” he said. “We may have the funds for a tax cut.”
Rep. Mike Karickhoff, R-30th District, said he was inclined to look at the upcoming revenue forecast in terms of funding public education, the Affordable Care Act and infrastructure improvements.
“There may be a way to make it happen in the future,” he said of a cut in the rate on individual income taxes.
Karickhoff asked those gathered to indicate by raising their hand if they supported a tax cut. Only one person raised their hand.
“I have not gotten a lot of response from people in my district,” he said. “I want to hear what people are saying.”
In other business
VanNatter said the legislation he has co-authored requiring drug testing for people receiving Temporary Assistance for Needy Families has passed the Indiana House and a Senate committee. He said it was headed to the Senate Appropriations Committee.
He was asked a question on the potential cost of setting up a testing program and the fact it would cost the state $1.2 million in the first year in lost revenues.
VanNatter said there is $600,000 in start-up costs the first year and overtime. She said the program will save the state money.
Karickhoff said it was a drug testing and prevention program and no benefits would be denied until a person tested positive three times.
“They have to participate in a drug treatment program,” he said. “The intent is to help people.”
The lawmakers were asked why the drug testing program didn’t include state employees, lawmakers and other people receiving state funding.
VanNatter said there are multiple ideas being considered but the legislation only covers people receiving TANF payments from the state.
Karickhoff said there has been a lot of discussion about the drug testing program in the House.
“I understand the argument that if you’re testing people on the low end of state benefits, why not test those people on the high end,” he said.
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