INDIANAPOLIS — Indiana lawmakers have about a week left to pass a balanced budget, a task made more difficult by a revenue report projecting a shortfall of over $2 billion over the next two years.
With less revenue to work with, legislators are considering several options to bridge the gap, including a potential increase in cigarette taxes. Currently, 16% of Hoosiers smoke cigarettes, a number that the American Lung Association reports is 2% higher than the national average. The proposal to raise taxes on tobacco products has been discussed at the Statehouse for years, and House Republicans have expressed their support.
“Obviously, I have voted for it, I am in support of it. We’ve said all along [that] it’s never made it through the Senate. We will have those conversations with them this week,” said House Speaker Todd Huston (R-Fishers).
However, the latest revenue projections raise questions about whether a cigarette tax change could be on the table. Senate republicans indicated they are more open to the idea.
“Our caucus was slightly more amenable to that than they have been in the past, primarily because of the challenge that Medicaid has created. So yeah, that is still on the table, but that is not at all going to be the first thing we look at,” said Senate President Pro-Tem Rodrick Bray (R-Martinsville).
The two largest items in Indiana's budget are Medicaid and education, and there is uncertainty surrounding how the legislature will proceed. Both parties have expressed a desire to avoid cuts to education funding.
“Our greatest investment in this state is in our safety net, and our safety net is always providing for the future, and education is that first step,” said Senate Minority Leader Shelli Yoder (D-Bloomington).
“We want to try and stay away from that [K-12 public education cuts] if at all possible,” Bray added.
House Republicans and the governor have prioritized the creation of a universal voucher program, which would eliminate income guidelines. House republicans say they are still going to look at ways to make the expansion happen.
“We fund students in the state of Indiana; we don’t fund systems. That’s the way our caucus has always approached it and the way we approach it today,” Huston said.
In contrast, Democrats are advocating for a rollback of the program.
“Every biennium we have increased those, and I think it’s time, because of this new reality, that we need to revisit that,” Yoder stated.
Republican senators are open to the voucher concept but emphasize the need to address funding challenges.
“The idea of having vouchers is certainly a viable option, but we are going to have to figure out how to pay for them if that’s the case,” Bray said.
In other legislative news, lawmakers sent a bill to the governor’s desk that would explore an adjustment to Indiana's state boundary, which could include parts of Illinois that voted to secede from their home state. While it would require several legislative steps, the bill has garnered broad support from Republicans in both chambers.
The legislative session is scheduled to conclude on April 29th. As lawmakers face the budget shortfall, questions have arisen about the necessity of a special session. However, leadership remains confident that they can pass a balanced budget by the deadline.
