INDIANAPOLIS (AP) — A broad package of business tax cuts, a preschool pilot program and new money for transportation headed to Gov. Mike Pence’s desk Thursday night after state lawmakers who fought bitterly early in the session over a gay marriage ban found consensus in the final hours of the 2014 legislative session.
House and Senate Republican leaders found ways to deliver many of Pence’s top priorities, if not all of what he sought this year, leaving House Speaker Brian Bosma, R-Indianapolis, sounding a positive note.
“I don’t think many people that at the start of this thought we would be in a position to say that, but it’s going to be one of the most substantial programs that we’ve seen,” said House Speaker Brian Bosma, R-Indianapolis, said of the preschool program.
The end of the session was a marked departure from its beginning, when emotional debates over a proposed constitutional amendment banning gay marriage divided lawmakers and brought hundreds of activists to the Statehouse on a regular basis.
Opponents of the marriage ban won a surprising victory last month when lawmakers removed language about civil unions from the amendment, forcing them to start the process anew. That means the soonest the issue could appear on a ballot is 2016.
The marriage battle also led to some political fallout. Senate Republican leaders stripped Sen. Mike Delph, R-Carmel, of his leadership posts and moved his Senate seat next to the Democrats in the chamber after he criticized their handling of the issue.
And Bosma announced he had been offered “unlimited campaign funds” to make the marriage ban “go away” this session. But the Republican donor who offered the help, former Republican Party Chairman Jim Kittle, roundly disputed Bosma’s claims.
By the end of last month, however, the focus had turned back to issues most lawmakers were more interested in addressing, including education and taxes.
Statehouse Republican leaders announced an agreement late Wednesday under which the state would potentially release $400 million for transportation projects this year. The state would also rely on $10 million from budget cuts and $5 million in private donations to launch a preschool program for children from low-income families.
Bosma said he believes the state could use the $400 million to leverage up to $2.4 billion for highway projects — including additional lanes for Interstates 65, 69 and 70 — through federal funding. The first $200 million would be given to the Indiana Department of Transportation immediately, but the second half would only be released after legislators receive an update of the state’s finances in December.
The business tax package calls for cutting the corporate income tax and state banking tax to 4.9 percent. It also would let local governments decide whether to cut the business equipment tax.
Pence originally sought to eliminate the state’s tax on business equipment, but local leaders opposed the measure because the tax provides critical revenues.
Supporters said the cuts were crucial to helping Indiana compete with other states for new businesses.
“We can raise taxes or we can grow the economy,” said Rep. Eric Turner, R-Cicero, the House author of the tax plan. “That’s what this bill does, it helps us grow the economy.”
But Democrats opposing the cuts said that lawmakers will have to come back next year and begin cutting critical services such as education and roads.
Sen. Karen Tallian, D-Portage, pointed to a legislative analysis that determined the cuts would drain $145 million from state coffers once fully implemented.
“You will be faced with declining revenue and increase demands and you will have to decline what Indiana services are we going to give up? Roads? Education? Job training?” Tallian asked.
Lawmakers also agreed to pitch in $10 million in state budget cuts and federal funds to pay for a preschool pilot program long-sought by Pence.
Children from low-income families in five Indiana counties would be eligible for the program, which also banks on $5 million in private sector funds. Families earning up to 127 percent of the federal poverty level — a little less than $30,000 for a family of four — would qualify.
The final bill passed by the General Assembly is a diluted version of Pence’s original request to serve 40,000 low-income children across the state. Lawmakers shied from the more expansive plan in face of potential budget shortfalls.
“It took us months to come up with a very small program and until today it’s hung by a thread to have even that happen,” said Rep. Ed DeLaney, D-Indianapolis. “Nobody should be beating their chest on either side of this place about this very modest success.”
A sweeping overhaul of the state’s criminal sentencing law finally passed the Legislature Thursday after more than five years of negotiations.
Supporters say the revamped system will dish out harsher penalties for the worst offenders and place nonviolent criminals in more appropriate correction facilities. This is the first major revision of the state’s criminal code in more than three decades.