Pence Proposals Missing From House Budget
As many of you are already aware, the Indiana House of Representatives has brought its budget to the ﬂoor. However, it did not include Governor Mike Pence’s 10% income tax cut across the board. Governor Pence has publicly stated he is “disappointed” that the Indiana House of Representatives did not take action on this initiative which would return hard-earned money to the Hoosiers who elected each of them to their respective ofﬁces. In addition to this public statement, Governor Pence has spent many days since his State of the State address traveling the state taking his ideas to Hoosiers. This grassroots methodology is a great tool for getting in front of the issue and making sure your message is heard without any confusion or misrepresentation.
The Speaker of the Indiana House of Representatives, Brian Bosma, took a different path to getting his version of the story out to Hoosiers in all 92 counties… he wrote a 3 page letter (on ofﬁcial House of Representative letterhead that was apparently not paid for at taxpayer expense) to all the GOP County Chairs in the state. In this letter, which was emailed from Bosma’s campaign email account, the Speaker laid out his version of what has been going on with the state’s budget process by saying “…to be sure you had all the information that your legislators have related to the budget that is about to pass the Indiana House.”
Speaker Bosma acknowledged that Governor Pence is extremely disappointed that his 10% tax cut is not included in the budget that is making its way through the legislature. Yet, in almost the same breath, Speaker Bosma expressed his disappointment that the discussions between General Assembly leadership and Governor Pence could not stay in the privacy of the Governor’s ofﬁce like it had when Mitch Daniels sat in the state’s chief executive chair. This frustration shows us that Governor Pence’s strategy of taking his message directly to Hoosiers is working and working well.
In the letter, it almost sounded as if Speaker Bosma was complaining that you, the voters, want and are willing to have frank discussions with your elected ofﬁcials at meet and greets and Lincoln Day Dinners. Isn’t this the responsibility of our elected ofﬁcials? Aren’t they suppose to be willing to talk to their constituents about their votes? For most, Lincoln Day Dinners are the only forums in which many people can talk to their representation, particularly during the legislative session.
Speaker Bosma made some very valid points in his letter to the 92 GOP county chairs across the state. Over the last 10 years, House Republicans have championed a minimum of 8 tax cuts including but not limited to a permanent cap on property taxes, the repeal of the “gross receipts” business tax and the phasing out of the “Death Tax”. Hoosiers are also the beneﬁciaries of one of the lowest costs per capita state governments in the nation, the lowest residential property taxes in the nation, and the best & lowest income tax rates of the 41 states with income taxes, according to the Tax Foundation, thanks to the successful policies of Mitch Daniels.
Hoosiers elected Mike Pence as the person to guide this great state through continued prosperity and he has decided to do that through his “Roadmap”. Governor Pence has taken a smart approach for his agenda by taking a commonly used practice of “stumping” for it across the state of Indiana and discussing its beneﬁts with Hoosiers. All in all, since the State of the State address, Governor Pence has made over 6 ofﬁcial visits across the state in support of his agenda.
Speaker Bosma took an aggressive step forward in his letter when, in a two sentence span, he calls Governor Pence a friend and mentions how House Republicans plan on passing a “…majority” of the Governor’s initiatives. In fact, Speaker Bosma singles out three priorities where most House Republicans have differences with Governor Pence:
1.) investments in roads & bridges,
2.) administration of state building projects & indebtedness, and
3.) restoration of the local school funding cuts that came about because of the recession.
The issue that I am most concerned with is the missing 10% income tax cut proposal from the House budget. It was, by far, Governor Pence’s gem from his State of the State address. So why didn’t the House include it in their version of the budget? The best explanation I could ﬁnd is the one Speaker Bosma offered in his letter. Here it is verbatim:
With respect to the income tax cut proposal, legislative leaders have expressed caution on this issue for a variety for reason, which I want you to understand. First, in 1998, the last time the state had a $2 billion surplus, a series of income tax and property tax cuts coupled with an unexpected downturn in the economy turned that surplus into a $1.3 billion deﬁcit in a short six year period. When Republicans regained the majority in 2004, our ﬁrst order of business was to ﬁll that hole through cuts (and not tax increases), and we did it. It was painful and difﬁcult, but we knew that the most important job of the state government is to be lean, efﬁcient, and most importantly, sustainable in the long run, avoiding wild shifts in one direction or another. That uncertainty of big shifts leads to uncertainty for business investment and family security. With pending sequestration, looming federal mandates and an uncertain national economy on the horizon, caution is certainly advisable.
Overall, this letter was an attempt by Speaker Bosma and/or his political staff to ﬁre a warning shot across the bow of the Pence administration. However, the letter was not as successful as they hoped it would be. Why? The simple fact is Speaker Bosma forgot the cardinal rule of politics…it is all local. Governor Pence has been traveling the Hoosier state building grassroots support for his policies. This kind of support cannot be altered by an impersonal letter…especially from an elected ofﬁcial who has significant less visibility than the governor.
House Republicans have assured the administration that come April (when the revenue forecasts are released), if the forecast holds steady they will consider adding the Governor’s 10% tax cut. This is a great ﬁrst step on the long road to compromise to make sure that Hoosiers get their hard-earned money back. Another part of compromise which should be considered by the two sides is that of phasing in this tax cut over the next two years. This would give the Pence administration the tax cut they are seeking for all Hoosiers and it would give the General Assembly a gradual ramp up so that they can ﬁnd (with Governor Pence’s help) common sense solutions to the issues Speaker Bosma listed in his letter.
Some say that this ill-advised letter was the ﬁrst step into a run for statewide ofﬁce by Speaker Bosma. While the Speaker is a laudable public servant, this methodology was ﬂawed. Governor Pence is extremely popular and is a great communicator. He is extremely proud of our General Assembly and respects the job they do. Speaker Bosma was very apologetic for writing the county chairs and including them in this “family discussion”. However, the Speaker’s error wasn’t in including Hoosiers in the discussion but rather his method of doing so and the tone he used. Hoosiers need to be part of this discussion…they can handle it. This is the very reason that Governor Pence has been traveling the state drumming up support.
This is a speed bump. It is natural. A new executive and an existing legislative leadership team are bound to get their wires crossed. The relationship between Governor Pence and the General Assembly is strong and productive. We can look forward to great things in the coming weeks, months and years. The state of Indiana is strong and will only get stronger. I believe that both the Governor and the Speaker can play a role in welcoming this even brighter future for all Hoosiers.