INDIANAPOLIS — The Indiana Senate was set Tuesday night to approve a $30 billion budget plan that includes new money for several highway expansions and a package of tax cuts.
Senate Republicans crafted the plan, keeping much of the additional education spending that House Republicans added to their budget proposal in February. But the Senate package also includes a $150 million cut to personal income taxes as a nod to Gov. Mike Pence, who originally wanted a $500 million cut in the tax.
If the package clears the Senate, differences between the plan and the House’s budget proposal would need to be worked out by a conference committee. The House plan doesn’t include the personal income tax cut, which had been the governor’s key agenda item.
Lawmakers are working with $2 billion in reserves and a $500 million surplus left by former Gov. Mitch Daniels, but they are also looking for ways to restore cuts to education and local roads that Daniels used to help burnish the state’s finances.
The Senate budget would devote $200 million a year to expand Indiana’s interstate highways. The money would pay for the construction of additional lanes on Interstate 65 and Interstate 70, as well as a further extension of Interstate 69. The budget would also help pay for the Indiana Commerce Connector, a new highway circling central Indiana from Martinsville east to Muncie.
The Senate also proposes eliminating the inheritance tax, and cutting a tax on banks and financial institutions by roughly $150 million.
Senate Democrats offered a series of amendments Monday aimed at expanding Medicaid and increasing money for schools and other areas. But Republican senators, who outnumber Democrats 37-13, easily voted down those attempts.
Pence said last week he was “pleased” with the Senate’s effort to give him at least some of the tax cut he has sought. House Republicans stripped the tax cut from the budget they approved in February, adding instead more money for public schools and local roads.
House Speaker Brian Bosma, R-Indianapolis, and Pence battled through much of the session over the the tax cut. Pence’s reception of the Senate plan was much more amenable, but he has said he would still lobby for his full tax cut.
