- Lesley Weidenbener
- House Ways &Means Chairman Tim Brown, R-Crawfordsville, talks to Abdul-Hakim Shabazz Wednesday about negotiations on the state budget bill. Lawmakers are trying to finish work on the bill Thursday for a vote on Friday.
Lawmakers will vote Friday to phase in a 5 percent cut in the individual income tax rate and eliminate the inheritance tax, the leader of the Indiana House said on Thursday.
House Speaker Brian Bosma, a Republican, said the cuts will "impact every Hoosier in a very positive way."
The income tax cut is half of the 10 percent break sought by Gov. Mike Pence, but he lauded it as a "great victory" for Hoosiers.
It will occur in two phases. On Jan. 1, 2015, the rate will drop from the current 3.4 percent to 3.3 percent. For the median Hoosier household with an income of $46,000, the savings would be $46 annually.
Then two years later, the rate will drop again, this time to 3.23 percent. For that same household, the additional savings would be about $32 more.
The deal between majority Republicans in the House and Senate also includes a tax cut for banks. Pence said the combination will "give a much needed boost to working families, small businesses and family farms."
Legislative leaders have labeled the deal as a $1.1 billion tax cut - an amount that would be reached over three years - but that includes a corporate tax phase-down that's already in state law.
Bosma described the combination as cuts that are authorized or included in the two-year, $30 billion budget, which will also boost funding for schools and roads.
Education will get a 2 percent increase in funding 2014 and 1 percent more in 2015. He said the total will be "the most money appropriated for public schools in state history. The budget also creates a $30 million performance fund to give extra money to good teachers and schools.
The budget boosts state and local road funding by $215 million. Bosma called that "a jobs creator."
Lawmakers said the full budget details will be available later today and the House plans a vote Friday evening. The Senate is expected to vote on Friday as well.
"We believe these tax cuts are responsible and will have a positive impact on every Hoosier taxpayer and provide a meaningful boost for the Hoosier economy," said Senate President Pro Tem David Long, R-Fort Wayne.
Samm Quinn is a reporter for TheStatehouseFile.com, a news service powered by Franklin College journalism students and faculty.