He persuades reluctant lawmakers to cut taxes — does he have out-of-state ambitions?
As Indiana governor, Mike Pence has been flying under the radar. While other Republican governors, such as Bobby Jindal and Scott Walker, have taken advantage of their platform to speak out nationally, Pence has stuck close to his state and focused on the concerns of Hoosiers. Pence — who attracted buzz as a potential 2012 contender when he was still a congressman in 2011 — has instead been working diligently to rack up accomplishments during his first term as governor.
Pence’s top accomplishment this session was cutting Indiana taxes. Initially, he had proposed slashing the income-tax rate, currently at 3.4 percent, by 10 percent. Well aware of the burden put on citizens by the federal tax hike on January 1 and by the looming costs of Obamacare, Pence was determined to do what he could to ease the pain for Hoosiers. “He felt pretty strongly that what he could do as governor was to reduce the price of living and working in our state,” explains Ryan Streeter, a top Pence adviser.
Legislators balked at a cut this large. “While we appreciated the governor’s proposal to cut our income tax, our income tax is rated the best and lowest in the nation among the 41 states that have an income tax,” says Indiana House speaker Brian Bosma, a Republican, referring to the Tax Foundation’s ratings. Bosma was concerned less about the income tax than Indiana’s death tax, which was rated number 43 (or the seventh highest) in the country by the Tax Foundation.
Bosma speculates that Pence’s original proposal differed from the legislators’ goals because Pence lacked familiarity with the state legislature and its policy goals. “In Governor Pence’s defense,” Bosma remarks, “he and his team have not had the decades of experience with our state tax system and the well-thought-out reduction-and-cut plan that we had implemented” in recent years.
Ultimately, Indiana lawmakers axed the death tax completely and cut the income tax by 5 percent (rather than the 10 percent Pence wanted), reducing the rate to 3.3 percent in 2015, then to 3.23 percent in 2017. “What we ended up doing was putting together a collective tax package that results in the largest tax cut in our state’s history, about $1.1 billion dollars” over the next four years, Bosma notes.