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(INDIANAPOLIS) – House Republicans’ push for a tax cut has a new ally: Governor Holcomb.

Holcomb has already urged legislators to approve a change in how business equipment is taxed. Now he says the administration’s fiscal analysts have looked at budget projections, and believe the state can afford a proposed income tax cut too.

Senate Republicans so far have said no to both, as well as the House’s proposed repeal of two utility taxes and an easier trigger for Indiana’s automatic tax rebate. Senators say the time to assess the budget is when they’re writing it, next year. Holcomb says he shares the sense of fiscal caution. He’s already said next year’s budget will include some big-ticket requests, including the eventual recommendations from a commission reviewing Indiana’s public health system. But he says the administration has shared budget models with legislators, indicating Indiana can not only think about but deliver a tax cut this year.

Holcomb says the tax break for business equipment, removing a depreciation limit on older equipment, would fix a disadvantage in competing with other states for new businesses. Senate Republicans have questioned whether the proposal can live up to assurances that cities and counties, which get the money from that tax, won’t be left in the lurch.

The House proposal cuts Indiana’s income tax rate over four years, from 3.23% to an even 3%. That would be the lowest rate since 1986, and would save $115 in taxes on an income of $50,000.

House Republicans heard testimony on a proposed sales tax cut but didn’t include it. Holcomb says he agrees the income tax is the best way to deliver tax relief.

Senators will vote next week on the bill, clearing the way for negotiations with the House on a final version.