Pence uses state of state speech to buck own party on taxes

New governor’s written speech included statement on guns, but it was left out of remarks for time

January 23, 2013

It’s been barely a week since Republican Mike Pence was sworn into office as Indiana’s governor, but he’s already staked a position that’s likely to rub his own party the wrong way. And he used Tuesday evening’s state of the state address — his first — to make the opening salvo.

“I come before you to proclaim that the state of our state is strong and growing stronger because we have good government and because we serve a great people,” Pence said to the Senators and Representatives gathered at the Indiana Statehouse in Indianapolis. “If we will remain bold, confident and optimistic, I am positive we can lead our state from good to great.”

And, Pence, said, one thing to be bold about is cutting Indiana’s tax rates, in particular those affecting families and small businesses.

“We have balanced budgets and surpluses when most states are broke or struggling,” Pence said. “We are one of only nine states with a AAA bond rating — higher than the federal government. But while we rightly celebrate our progress, these are still difficult times for too many in our state. As we gather this evening, a quarter million Hoosiers are out of work, and nearly one million Hoosiers lack the skills they need to succeed in today's marketplace.

“Despite progress in education, too many of our schools are still lagging behind, some way behind. And, especially heartbreaking to this father, one in five Hoosier children lives in poverty. That is unacceptable,” Pence said. “With so many families and businesses struggling just to get by, we have no choice but to remain bold. We have to do better.”

Pence is looking to lower Indiana’s personal income tax rate (already low by its neighbors’ standards) by 10 percent, from 3.4 percent to 3.06 percent. He said that could free up some $500 million every year in additional money Hoosier will have to spend. That, he said in the address, would spur growth in Indiana.

Pence anticipated that critics — including budget hawks in his own party, which holds super-majorities in the House and Senate — wouldn’t buy this line of reasoning. Their argument that tax cuts could hurt Indiana’s ability to meet its needs over the next two years, he said, isn’t acceptable.

“I know there are some who say we have to choose between letting the people of Indiana keep more of their hard-earned dollars and meeting our state’s priorities, but our budget clearly shows, we can do both,” Pence said.  “By lowering the personal income tax rate by 10 percent, it will be official: Indiana will have the lowest taxes rate in the Midwest.”

Pence’s address was reminiscent of those delivered by his Republican predecessor. Mitch Daniels had made spending cuts and lower tax rates the foundation of administration and he’d often argued that such actions would increase economic growth. Pence spent a good deal of Tuesday’s address echoing Daniel’s rhetoric.

“Our budget is honestly balanced, holds the line on spending, funds our priorities, builds our reserves and lets hardworking Hoosiers keep more of what they earned,” he said. “Let's be clear: Government doesn't create jobs, other than government jobs, but government can create the conditions where people can be the risk takers, innovators and workers who will create the jobs and opportunities of tomorrow.”

Beyond taxes

Pence did lay out where he’d consider exceptions, which he said should include the expansion of pre-kindergarten. He also said he’d like to free up additional dollars to spend on infrastructure improvements.

He also mentioned providing an additional $35 million a year to Indiana’s Department of Child Services to help better investigate child abuse cases. The department has been scrutinized over child-abuse deaths in recent years, including the case of Christian Choate of Northwest Indiana.

The 13-year-old Choate had been abused and kept in a cage by his own parents which lead to his death but he wasn’t found until two years after his death. His body was buried in a shallow grave in a mobile home park in Gary, Indiana in May 2011.

His father, 40-year-old Riley Choate, was sentenced this month to 80 years in prison for his son’s death. They boy’s step-mother, Kimberly Kubina, will be sentenced next month for her connection to the case.

He also wants to ease up on some of the requirements in Indiana’s school voucher program so that more parents can send their children to private schools. The voucher program provides taxpayer money to parents who meet a certain income requirement. The program’s taken off in many areas, including Gary.

Pence veered away from most social issues, such as abortion and same-sex marriage. A written version of his address suggests the new governor wanted to take a position on gun control, saying Indiana should resist moves made in other states (e.g., New York) to add additional controls on firearms.

“While others have rushed to the well-worn arguments over gun control, Hoosiers know this not about access to firearms,” Pence’s speech stated. “It is about access to schools. Hoosiers have responsibilities to protect our kids, and Hoosiers have rights. We will protect our kids and we will protect our rights. Hoosiers know we can do both.”

The delivered speech, though, didn’t mention the issue. A spokeswoman said time constraints kept Pence from saying that passage and one another.

Mum on Northwest Indiana?

Pence didn’t mention the Democratic stronghold of Northwest Indiana in his speech and, from the party’s vantage, he didn’t address their issues, either.
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“I’m not surprised,” said Indiana State Rep. Mara Candelaria Reardon, a Democrat from Munster, which lies along the border with Illinois. She says Pence’s spending proposals neglect crumbling infrastructure in Northwest Indiana.

“When we talk about roads and bridges being in disrepair, we know that Northwest Indiana is being neglected with the Cline Avenue Bridge,” Reardon said, referring to a long-troubled bridge that was closed abruptly in November 2009 after it was found to be in disrepair. It’s now being replaced by a toll bridge.

Reardon says the Pence’s tax cut proposal could ultimately hurt local governments, which  sometimes get assistance from the state level.

House Democratic Leader Scott Pelath of Michigan City says he’s taking a wait and see approach as it relates to the tax cut.

“We’re willing to listen to governor’s tax cut proposal, but it must benefit [the] middle class and answer various concerns,” Pelath said. “We have to be mindful that the middle class is facing a lot of different pressures, not just in taxes.”

Longtime state Rep. Charlie Brown (D-Gary), says he was disappointed that Pence made no mention of health care.

“Jobs are wonderful, education is wonderful but you can’t look forward to holding down a job or getting higher ed, if you’re not in the best of health,” Brown said. “That’s the most shocking thing of all to me that the Governor has not devoted much attention to healthcare.”