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[r41] Largest tax cut in Hoosier history
Start Date: 4/27/2013Start Time: 12:00 AM
End Date: 4/27/2013End Time: 11:59 PM
Entry Description
Largest tax cut in Hoosier history

STATEHOUSE — Authored by the Chairman of Ways and Means, State Representative Tim Brown (R-Crawfordsville), House Enrolled Act (HEA) 1001, the biennial budget for the State of Indiana, passed this session with a 70 to 30 vote and sent to the Governor for his signature to become law.  

“This budget is about giving more to Hoosiers through tax relief and employment opportunities. It will spur economic growth, educational achievement and protect our state for years to come by having prudent reserves in place,” said Rep. Brown. “I’ve said since day one of being privileged to take this position that I want two things: a balanced budget and to get out on time. We’ve accomplished both these feats with a budget that Hoosiers can be proud of.”

Below are highlights included in the state budget bill:

Focuses on Fiscal Integrity
  • Reduces taxpayer funded debt by repaying $128M in bonds owed on two state facilities
  • Provides cash funding for nearly $225M in state and university capital projects
    o Cash funding will save taxpayers nearly $160M (or 41%) versus debt financing
  • Maintains strong reserve balances at or above 12.5% of annual operating revenues in both years of the biennium
  • Preserves strong structural budget surpluses of over $100M in FY 2014 and $275M in FY2015
Protects Hoosier Taxpayers
  • Provides the largest tax cut in Indiana history
    o When fully implemented, the tax cut package will reduce taxes by $650M+ per year
    o Immediately repeals the death tax (effective January 1, 2013)
    o Cuts the individual income tax rate by 5%
    - Rate will lower to 3.3% in TY 2015 and 3.23% in TY 2017
  • Phases down the financial institutions tax rate to 6.5% over four years and allows for the continued phase‐down of the corporate income tax rate
Invests in Education
  • Increases K-12 education funding by $390M over the biennium
    o K‐12 appropriations exceed pre‐recession funding levels
    o K‐12 tuition support increased by 2% in FY14 and 1% in FY15
  • Provides an additional $30M for K‐12 performance funding in FY15
  • Provides funding to repay charter school start-up loans
  • Creates an Early Education Matching Grant program funding Pre-K education at $2M per year for low-income children
  • Invests an additional $190M over the biennium for higher education
  • Increase funding for student financial aid by $75M over the biennium
Builds and Maintains Infrastructure
  • Provides an additional $215M per year in funding for state and local roads and bridges
    o 47% of the funds will be directed to local units with no strings attached
  • Reserves $400M in the Major Moves 2020 Fund over the biennium for future transportation infrastructure needs
Boosts the Hoosier Economy
  • Increases funding for key workforce development programs such as the Skills Enhancement Fund and adult education over the biennium
  • Funds new innovative initiatives such as the Indiana Career Council, Indiana Works Councils, the Work Indiana program and the Indiana Biosciences Research Institute
Protects the Vulnerable
  • Provides an additional $35M per year to the Department of Child Services for staff and improved behavioral and mental health services; fully funds the Medicaid forecast; and increases funding for a variety of programs that serve Hoosiers in need
“This budget shows where the General Assembly’s focus is – jobs and education,” said Rep. Brown. “It’s critical to the entire process that we look at the long-term health and sustainability of the funding levels set in the budget. Indiana will continue to see growth because of the conservative principles put to action and the tax relief provided for Hoosiers to invest and spend their hard-earned money back into the economy. I would always rather see more money in the pockets of Hoosiers than in state coffers. This budget does that.”

-30-
Contact Information:
Name: Nicholas Goodwin
Phone: 3172329831
Email: ngoodwin@iga.in.gov
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