The Republican said last week the state spending proposal he'll submit to lawmakers in December will follow the same "fiscal responsibility" principles he campaigned on in 2012 and enacted in his first budget in 2013. The state's next two-year budget takes effect
"We're in the process right now of beginning to build that budget proposal, but I promise you it's going to be built on our commitment to an honestly balanced budget, to living within our means, to promoting the kind of policies that will create jobs and opportunities for Hoosiers," Pence said.
Agency spending has been further cut by the governor's "reversions," which are mandatory kickbacks to the state's General Fund aimed at preserving
Democrats repeatedly have criticized Pence for taking back money lawmakers intended agencies to spend, though every state budget approved by the
Pence said he will continue to use reversions, as needed, to maintain
"Tough decisions that we've made since I became governor to make sure that we live within our means, that we maintain the kind of reserves that will ensure that strong fiscal foundation (have) been a priority for our administration and will continue to be," Pence said.
The state's largest spending item -- education -- also likely won't get a big bump in the next budget, in part because
State spending for classroom instruction in elementary and high schools grew 2 percent during the 2014 budget year, which ended
However, about 12 percent of that additional education money went to pay religious and private school tuition for students who never previously attended public school, as part of a Pence-backed expansion of the state's private school voucher program.
The Republican-controlled Legislature is expected next year to try to make even more Hoosier students eligible for vouchers, thereby redirecting at least a portion of any additional school funding they may approve away from public schools.
At the same time, Pence's repeal of the state's inheritance tax and a 1 percent cut in the corporate income tax over the past two years have reduced state revenue well below expected growth.
Revenue during the 2014 budget year was less than the state took in during 2013, the first year-over-year revenue decline since the Great Recession.
State revenue could continue falling in years to come as the corporate tax rate drops from 7 percent to 4.9 percent by 2021, under a tax cut plan Pence signed
Since the state is required to balance its budget, any revenue reductions likely will prompt further spending cuts, since Pence has ruled out ever increasing taxes. Nearly 60 percent of
On the other hand, Pence remains confident the state's lower taxes will attract new businesses and people to
"I have to tell you, every time I'm out selling the state of
Pence was noncommittal when asked if his next budget will include additional business tax cuts, but he seemed open to the idea.
"We're looking at a broad range of options for how we can promote an environment that will invite investment and invite growth," Pence said. "It's important to me that we seize every opportunity to make
The governor failed to win approval in the last legislative session for his plan to phase out the business personal property tax, an annual assessment on business and manufacturing equipment that provides more than
Some version of a business personal property tax repeal is expected to again be considered by the
(c)2014 The Times (Munster, Ind.)
Visit The Times (Munster, Ind.) at www.nwitimes.com
Distributed by MCT Information Services