Indiana taxpayers will see their personal income tax rate reduced by 5% over the next four years under a budget plan agreed to by state lawmakers.
Gov. Mike Pence had sought a 10% cut as 1 of his signature campaign proposals, but lawmakers were initially cool to the idea.
Improved tax collection estimates earlier this month improved Pence's chances in the waning days of the session.
The tax rate cut will be phased in in two steps starting Jan. 1, 2015.
Pence hailed the agreement Thursday as a "great victory" for taxpayers.
The budget plan also calls for repealing the inheritance tax retroactive to Jan. 1 of this year.
Indiana Chamber of Commerce President and CEO Kevin Brinegar reacted to the budget provisions:
"The new state budget has a strong focus on jobs and economic growth, putting additional investments into education and workforce development while also making important tax cuts," said Brinegar.
"Trimming the individual income tax rate by 5% will not only benefit working Hoosiers but also many of the state's smallest business owners. "It was particularly important to see some K-12 funding restored (cut during the last budget process) and more dollars targeted for our highways and infrastructure system," he said.
"Meanwhile, the immediate elimination of the inheritance tax is long overdue and will lift a significant burden off of small, family-owned businesses. "We commend House and Senate leaders, the governor's office and all those who got the budget to where it is – fiscally sound and including a wide variety of positive provisions for Hoosiers," said Brinegar.
State lawmakers must approve the budget before wrapping up their 2013 session. They expect to adjourn Friday.
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