Tax cut added to road funding bill

INDIANAPOLIS (WISH) – A road funding bill that includes tax hikes on cigarettes and gasoline now includes a tax cut.

It’s a cut in the state income tax that was added in a committee hearing at the Statehouse Thursday.

A number of lawmakers are unwilling to vote for tax hikes of any kind so the effort to create a long term funding source for roads now includes a phased in tax cut that would make the bill revenue neutral after 8 years.

The income tax rate would fall from 3.23 percent to 3.06 percent over a period of ten years.

It’s an effort to win support for a plan backed by House Republicans and opposed by GOP Governor Mike Pence.

It passed the House Ways and Means committee today on a 14-to-7 vote and now heads to the House floor for a vote next week.

“Is that my first choice?” asked House Speaker Brian Bosma. “Absolutely not. Am I hoping to make our package a little more attractive to our Senate colleagues and meet one of the governor’s long term goals? Yeah, absolutely.”

One of the arguments against the plan is that, if you can afford a tax cut, there should be no need for tax hikes.

“Is that prudent?” asked Senate GOP Leader David Long. “A lot of that depends on the economic circumstances of the state at the time we consider passing it but I think those are two separate issues.”

He’s talking about road funding and a tax cut.