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Business tax cuts, preschool funding pass as session ends

Gov. Mike Pence is surrounded by children IndianNational Guard members as he signs bill inlaw Thursday March 13 2014 IndianWar

Gov. Mike Pence is surrounded by children of Indiana National Guard members as he signs a bill into law, Thursday, March 13, 2014, at the Indiana War Memorial. The legislation makes about 26,000 of Indiana's veterans eligible for grants from the state's Military Family Relief Fund to pay for food, housing and other expenses. The new law that takes effect July 1 ends a restriction that currently limits veterans' eligibility for the grants to three years after their military service is over and expands it to veterans who served after the Sept. 11 terrorist attacks. (AP Photo/Rick Callahan)

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Updated: April 15, 2014 6:22AM



INDIANAPOLIS — A broad package of business tax cuts, a preschool pilot program and new money for transportation was sent to Gov. Mike Pence’s desk Thursday night after state lawmakers who fought bitterly early in the session over a gay marriage ban found consensus in the final hours of the 2014 legislative session.

House and Senate Republican leaders found ways to deliver much of the House Republican proposals, which Pence signed onto. The broad success left House Speaker Brian Bosma, R-Indianapolis, sounding a positive note.

“All in all it’s just been a tremendous session,” Bosma said, shortly after gaveling to a close Thursday night. “I’m very proud of the members here — Republican and Democrat, House and Senate. They worked hard. They brought this home despite the predictions that we’d get sidetracked.”

House Minority Leader Scott Pelath, D-Michigan City, had a sharply different view of the past two months at the Statehouse.

“When the true standard for creativity is set in trying to explain to the people of Indiana that many things have been done on their behalf these past two and a half months — as the governor and the leaders of his super-majorities have tried to do today — you know that the bar of accomplishment is very low,” Pelath said in a statement.

The end of the session was a marked departure from its beginning, when emotional debates over a proposed constitutional amendment banning gay marriage divided lawmakers and brought hundreds of activists to the Statehouse on a regular basis.

Opponents of the marriage ban won a surprising victory last month when lawmakers removed language about civil unions from the amendment, forcing them to start the process anew. That means the soonest the issue could appear on a ballot is 2016.

The marriage battle also led to some political fallout. Senate Republican leaders stripped Sen. Mike Delph, R-Carmel, of his leadership posts and moved his Senate seat next to the Democrats in the chamber after he criticized their handling of the issue.

And Bosma announced he had been offered “unlimited campaign funds” to make the marriage ban “go away” this session. But the Republican donor who offered the help, former Republican Party Chairman Jim Kittle, roundly disputed Bosma’s claims.

By the end of last month, however, the focus had turned back to issues most lawmakers were more interested in addressing, including education and taxes.

Statehouse Republican leaders announced an agreement late Wednesday under which the state would potentially release $400 million for transportation projects this year. The state would also rely on $10 million from budget cuts and $5 million in private donations to launch a preschool program for children from low-income families.

Bosma said he believes the state could use the $400 million to leverage up to $2.4 billion for highway projects — including additional lanes for Interstates 65, 69 and 70 — through federal funding. The first $200 million would be given to the Indiana Department of Transportation immediately, but the second half would only be released after legislators receive an update of the state’s finances in December.

The business tax package calls for cutting the corporate income tax and state banking tax to 4.9 percent. It also would let local governments decide whether to cut the business equipment tax.

Pence originally sought to eliminate the state’s tax on business equipment, but local leaders opposed the measure because the tax provides critical revenues.

Supporters said the cuts were crucial to helping Indiana compete with other states for new businesses.

“We can raise taxes or we can grow the economy,” said Rep. Eric Turner, R-Cicero, the House author of the tax plan. “That’s what this bill does, it helps us grow the economy.”

But Democrats opposing the cuts said that lawmakers will have to come back next year and begin cutting critical services such as education and roads.

Sen. Karen Tallian, D-Portage, pointed to a legislative analysis that determined the cuts would drain $145 million from state coffers once fully implemented.

“You will be faced with declining revenue and increase demands and you will have to decide what Indiana services are we going to give up? Roads? Education? Job training?” Tallian asked.

Lawmakers also agreed to pitch in $10 million in state budget cuts and federal funds to pay for a preschool pilot program that Pence has long sought.

Children from low-income families in five Indiana counties would be eligible for the program, which also banks on $5 million in private sector funds. Families earning up to 127 percent of the federal poverty level — a little less than $30,000 for a family of four — would qualify.

The final bill passed by the General Assembly is a diluted version of Pence’s original request to serve 40,000 low-income children across the state. Lawmakers shied from the more expansive plan in face of potential budget shortfalls.

“It took us months to come up with a very small program and until today it’s hung by a thread to have even that happen,” said Rep. Ed DeLaney, D-Indianapolis. “Nobody should be beating their chest on either side of this place about this very modest success.”

A sweeping overhaul of the state’s criminal sentencing law finally passed the Legislature Thursday after more than five years of negotiations.

Supporters say the revamped system will dish out harsher penalties for the worst offenders and place nonviolent criminals in more appropriate correction facilities. This is the first major revision of the state’s criminal code in more than three decades.

In the waning minutes of the session, lawmakers gave final approval to a bill allowing parents to keep guns in their cars in school parking lots. But measures to extend a nursing home construction moratorium and drug test some welfare recipients both failed to find enough support.



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