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General Assembly

Tax cut package passes, goes to Pence

State lawmakers approved a state and local tax cut package Thursday.

The program – a mix of a state corporate tax cut and optional local changes to the business personal property tax – is contained in Senate Bill 1.

It passed the Senate 36-12 and the House 63-37.

It now heads to Gov. Mike Pence for his consideration.

“This is a strong jobs bill with local flexibility,” said Rep. Eric Turner, R-Cicero.

One part of the bill involves the state corporate tax. Lawmakers previously passed legislation lowering it from 8.5 percent to 6.5 percent by fiscal year 2016. It is currently at 7.5 percent, and under the new law, it would further drop to 4.9 percent by fiscal year 2022.

The larger sticking point was how to attack the business personal property tax.

Pence started the discussion by pushing for an elimination or phase-out of the tax paid on equipment and machinery. It brings in about $1 billion in revenue annually to Indiana schools, cities, towns and other local units.

In the end, lawmakers gave local units of government several options to reduce the tax. For instance, local officials could give a so-called “super abatement” to specific companies on equipment for up to 20 years.

Or local units could eliminate the tax on certain small tax filers. Even if every county opted in, the tax would be reduced by only about $13 million statewide.

The biggest option, though, would be to allow counties to exempt all new equipment from the tax. While there would be no immediate fiscal impact, the tax would disappear over time as equipment is replaced.

Local officials have warned that this approach will lead to competition among counties that isn’t healthy for the state.

The business personal property tax changes aren’t effective until July 2015. This summer, a blue-ribbon commission will study the matter in case lawmakers need to make changes next session.

Rep. Scott Pelath, D-Michigan City, said the package helps only a few and leaves many Hoosiers behind.

Welfare drug testing

A proposal to drug test Hoosiers receiving welfare died on the last night of the session Thursday – for the second year in a row.

The Indiana House passed House Bill 1351 81-17, but the measure died in the Senate when it tied 24-24 – not receiving a constitutional majority of votes.

The cost of the program was expected to be $1.3 million in the first year and just less than $1 million annually with savings of a few hundred thousand dollars.

Under the bill, all Hoosiers receiving cash assistance would take a screening exam meant to identify people with a propensity to use drugs. Those identified will then be screened for drugs.

Also, anyone with pending drug charges or convictions within the last past year would be tested.

Positive results could result in a loss of benefits, though participation in a rehab program would allow the benefits to continue.

“We’re better than this,” said Sen. Ron Alting, R-Lafayette.

In the House, Rep. Phil GiaQuinta, D-Fort Wayne, voted no. In the Senate, the northeast Indiana delegation split. Sen. Dennis Kruse, R-Auburn, and Sen. David Long, R-Fort Wayne, voted yes. Sen. Sue Glick, R-LaGrange; Sen. Travis Holdman, R-Markle; and Sen. Tom Wyss, R-Fort Wayne, opposed the bill.


The General Assembly has freed up at least $200 million for major highway projects – and could be as much as $400 million – under a bill passed by both chambers Thursday.

The House approved House Bill 1002 95-4, and the Senate followed with a 43-5 vote.

Last year, lawmakers set aside $400 million for future major expansion projects. Pence sought to use the money now to aid the state highway budget.

He is expected to sign the bill into law.

The legislation makes $200 million immediately available and would allow the State Budget Committee to release another $200 million this year depending on how tax collections come in for the biennial budget.

There is no money in the bill for local units.

Criminal code

The House and Senate gave final approval to a criminal code overhaul meant to punish the worst offenders and send nonviolent Hoosiers to local corrections programs.

It is the culmination of about five years of work by lawmakers. House Bill 1006 passed the House 84-12 and the Senate unanimously.

Pence will now consider the law.

The legislation sets new sentencing guidelines for all crimes; changes credit time rules at the Indiana Department of Correction; and gives local judges more discretion on sentences for low-level offenders.

It also makes up to $11 million available for local community corrections and probation grants. But that money depends on the prison population dropping and redirecting those savings.