Revised Indiana budget bill: tax hikes & spending cuts across the board

Legislators seek to double cigarette tax to $2 per pack

By GREGG MONTGOMERY
WISH-TV | wishtv.com

Republicans and Democrats on Wednesday afternoon had news conferences to discuss the final version of the Indiana budget bill.

The changes in the biennial budget from July to July 2027 are part of Senate Bill 1.

Lawmakers had to make major changes after last week’s announcement of an anticipated revenue gap of $2.4 billion in the biennial budget period. Lawmakers have been in session for months drafting the budget that would fund government, and numbers prepared in December previously had driven budget planning.

Senate President Pro Tem Rodric Bray, R-Martinsville, noted that, for about 10 days, lawmakers have been looking at making cuts across the board.

Here are highlights of changes that Republicans announced Wednesday:

• Raising the cigarette tax: Perhaps the biggest change the doubling of the Indiana tax for cigarettes and other tobacco products. All the extra money raised will go to Medicaid, which is fast-growing in the state budget. The tax on a pack of cigarettes and other tobacco products will rise from about 99.5 cents to $2, raising $4 million for cigarettes and $25 million a year for other tobacco products.
• Tax increase on other products: Taxes to rise 2 percent on some other products, with details to come.
• K-12 budget growth: K-12 funding will grow by 2 percent each of the next two fiscal years. Additional money was put in the second fiscal year to cover a program to allow vouchers for school choice.
• Higher education: A 5 percent cut.
• Local governments: An increase of 1.6 percent in the first year, and 5.1 percent in the second year.
• Public health: Falls to $40 million from $100 million per year.
• Indiana Economic Development Corp.: The agency took a 25 to 30 percent cut, which was more than other state agencies. The IEDC has been under fire recently for its transparency in spending in recent years.
• What’s fully funded? The Department of Child Services, the Family and Social Services Administration, and the teacher retirement fund.

This story was originally published by WISH-TV at wishtv.com/news/politics/revised-indiana-budget-bill-tax-hikes-and-spending-cuts-across-the-board.