The Herald Bulletin

June 12, 2013

Indiana lawmakers override Pence on local tax measure


The Associated Press

INDIANAPOLIS — Indiana lawmakers easily reversed Gov. Mike Pence's veto of a local tax measure Wednesday, delivering their first veto override of the new governor during a special one-day meeting of the General Assembly.

The House of Representatives voted 68-23 and the Senate voted 34-12 to override the governor on a tax measure Jackson and Pulaski County officials said was needed to authorize taxes they had already been collecting to pay for the construction of jails.

Pence wrote to lawmakers Monday asking them to sustain his veto of retroactively implementing local income taxes for the counties. But Senate President Pro Tem David Long, R-Fort Wayne, and House Speaker Brian Bosma, R-Indianapolis, pushed the override, saying the bill corrects a tax mistake overlooked by the state and local officials.

"I thinks it's a constitutional action by the Legislature implementing what we thought was the better solution," Long said, following the Senate vote. "The governor had his own idea about that, we respectfully disagreed and we overrode his veto."

Pence spokeswoman Christy Denault repeated the governor's assertion that taxpayers should not pay taxes that "are not owed."

"Governor Pence stands by his veto and regrets that it was not upheld by the Indiana General Assembly today," Denault said in a statement. "While this bill contained some positive provisions, the governor believes that when Hoosiers pay taxes that are not owed, they should be offered relief. Hoosiers can be assured that Governor Pence and his administration will continue to put taxpayers first."

State lawmakers first approved marginal local income tax increases in 1998 to pay for the taxes but failed to approve the continuation of the tax in later years. The Indiana Department of Revenue, meanwhile, kept collecting the taxes and redistributing them to the counties.

Rep. Eric Turner, R-Cicero, said no lawmaker wants to needlessly raise a tax or unfairly approve a tax that was already being collected illegally, but noted that residents would pay more in taxes if the veto were sustained because the county would have to find other ways to pay for the jail.

"At the end of the day, we felt like local taxpayers would pay more, and so that's the reason we came up with this solution in this bill," said Turner, the author of the legislation.

The override marked another legislative defeat for Pence at the hands of his own party, but the governor, Long and Bosma have played down any discord. House Democrats, meanwhile, lined up with the governor, with some arguing a retroactive "correction" could lay the groundwork for others to seek retroactive changes from the Legislature.

"A terrible precedent is set," said Rep. Patrick Bauer, D-South Bend, the former House minority leader. One House Republican, Rep. Milo Smith of Columbus, joined with Democrats in voting to sustain the veto. The results were mixed in the Senate, with seven of the chamber's most conservative Republicans joining with a handful of liberal Democrats in support of Pence.

Turner pointed out that it was Jackson County officials who discovered the mistake, not anyone in with the state. The discovery marks a third reported error from the Department of Revenue, though nothing on the scale of the pair of mistakes which caused the state lose track of $526 million in tax collections.