(INDIANAPOLIS) – Senate Republicans are getting more blunt about their skepticism of a House-passed tax cut.
Governor Holcomb and House Republicans have endorsed a change in how business equipment is taxed. The money from that tax goes not to the state, but local governments. Senate Tax and Fiscal Policy Chairman Travis Holdman (R-Markle) says he’s not satisfied with House predictions that the change will avoid reducing what cities and counties receive, and warns he’ll “find it very hard” to vote for a tax cut which punches a hole in local budgets.
Holdman says while the effects of the change in depreciation rules would wash out in seven or eight years, that’s too long for cities and counties which are repaying bonds financed through anticipated tax revenue.
Senate leaders have said before they have concerns about cutting taxes before they look at the entire budget next year, but Holdman’s comments are the most direct statement of opposition from Senate Republicans.
The House passed the tax cut bill last week on a mostly party-line vote. Along with the business personal property tax cut, the bill slashes individual income taxes by 7% over four years, repeals two taxes on utility bills, and makes it easier to trigger Indiana’s automatic tax rebate law.
House Speaker Todd Huston (R-Fishers) says with legislative budget analysts increasing their forecast for Indiana’s surplus to more than five-billion dollars, the General Assembly should move to return that money to taxpayers. Senate President Pro Tem Rod Bray (R-Martinsville) says Holcomb’s support for lowering the tax on business equipment is a significant factor, and pledges the Senate “will take [the bill] very seriously.” But he says he’s still concerned about rewiring the tax code in the middle of a two-year budget, especially with inflation, a shrinking workforce, and supply-chain issues adding potential economic wild cards.
The Senate will take up the bill next month. It hasn’t been assigned to a committee yet, but is likely to go to the Appropriations Committee, chaired by Bremen Republican Ryan MIshler.
