Gov. Mike Pence said Thursday that an income tax cut in the Indiana Senate's proposed budget is a start but he'll still push for the $500 million cut he has proposed.
Senate Republicans put forward a $30 billion budget Thursday that cuts the state's personal income tax by a total of $150 million annually and funds an expansion of major highways.
The full Senate will vote on the budget next week.
Pence wanted lawmakers to slash the income tax from 3.4 percent to 3.06 percent.
Republicans have also proposed eliminating the inheritance tax and cutting the financial institutions tax by 2 percentage points.
Senate Republicans said that combined with eliminating the inheritance tax and several business tax cuts, they are reducing the government's take by about $500 million.
Senate Republicans propose putting $200 million a year in a new transportation fund to pay for additional lanes on Interstate 70 and Interstate 65 crossing the state.
The plan also would pay for building a new bypass around most of Indianapolis.