SOUTH BEND -- Lowering Indiana's income tax rate was one of the main ideas Mike Pence talked about while running for governor last year.
Pence, a Republican who took office in January, is talking about the tax cut more than ever now as he tries to convince state lawmakers to go along with it.
He's pitching his plan outside the Statehouse as well.
Pence spoke about his goals Wednesday to 180 people at a St. Joseph County Chamber of Commerce luncheon at the DoubleTree by Hilton downtown.
His desire to trim Indiana's income tax rate from 3.4 percent to 3.06 percent -- a 10 percent drop -- figured prominently in his message.
"I'm someone that believes government should collect only what it needs," he said. "And when government collects more than it needs, I think it should return that to the hard-working taxpayers who earned it in the first place."
Pence said the tax relief would help Indiana residents and small-business owners at a time when federal tax rates have risen.
"When you lower the personal income tax rate, it's also the best way to lower taxes on job creators," he said.
"Most statistics show that more than 90 percent of business enterprises in the state of Indiana don't file their taxes under the corporate tax rate; they file their taxes under the personal income tax rate," he continued. "If you want to lower taxes on job creators, lower the personal income tax rate so small businesses can hire more employees and purchase new equipment and grow."
Pence said the tax cut would also make Indiana "the lowest-tax state in the Midwest," according to the Tax Foundation.
"We might just have to put that on all the billboards facing out," he said.
It hasn't been easy, however, for the new governor to sell his tax plan to the General Assembly, even though Republicans hold large majorities in both the House of Representatives and the Senate.
Neither the House nor the Senate has advanced budget proposals that include the tax cut during this year's legislative session.
The cut would reduce the state's tax revenue by about $500 million per year, and some Republican leaders have said that money should be used to restore funding for education and other programs scaled back during the recession.
Pence said the state can afford to increase funding for education, infrastructure and other services as well as provide tax relief, thanks to the austerity that former Gov. Mitch Daniels and the legislature showed during the past eight years.
Indiana's government closed out its fiscal year at the end of June with $2.15 billion in reserves -- the largest surplus in state history.
The General Assembly's legislative session is scheduled to wrap up at the end of April, so Pence still has time to push the income tax cut.
He said that's what he'll do.
"It's still very early in the legislative process," he told reporters after the Chamber event.
"We are continuing to meet with legislative leaders and members of the General Assembly in both political parties to make the case for our jobs budget, for our funding priorities and to make the case for income tax relief for Hoosiers," he said, "and I look forward to doing that over next several months."
Staff writer Kevin Allen: