Session ends with bipartisan income tax cut | Local News
INDIANAPOLIS — In the early hours of Wednesday, lawmakers finalized their bills for the 2022 session and found common ground on income tax cuts that offered a compromise between the House’s desire to cut taxes and the Senate’s wish for caution.
The cuts will be phased in over 10 years until the tax rate drops to 2.9%, which would tie Indiana to North Dakota, which now has the lowest tax rate in the country.
The first tax reduction occurs in 2023 when it goes from 3.23% to 3.15%. Subsequent cuts have triggers and will only take effect if revenues increase by 2% and pre-1996 teachers’ pension obligations are honored.
“What we want to do is continue to make sure that we are accountable and that we keep as much money in Indiana’s economy and not just in state coffers,” the president said. of the House, Todd Huston, R-Fishers.
Senate GOP Leader Rodric Bray, R-Martinsville, remained adamant that with Ukraine’s uncertainty, supply chain issues and labor challenges, the The state needed to approach tax cuts in a measured way.
“I think with those triggers it won’t let us go too far over and beyond our skis and will keep Indiana moving very carefully and responsibly.”
The Indiana Chamber of Commerce said lawmakers failed to support a business-friendly tax cut that would have removed the 30% cap on personal property for businesses. The senators said the tax would hurt municipal budgets that depend on the tax.
“It’s unfortunate that Senate Republicans don’t see that (the tax) shouldn’t be happening and only serves to discourage large capital investments in Indiana,” said Kevin Brinegar, president and CEO. House leadership, in a statement.
The bill also repeals Indiana’s 1.4% utility tax effective July 1.
The bill passed unanimously in the Senate, with 11 Democrats joining the Republican supermajority, but House Democrats did not share the same enthusiasm.
At least two Democrats, Reps. Rita Fleming and Terri Austin, D-Anderson, voted for the tax cuts and broke with fellow Democrats.
Democrats pushed unsuccessfully to suspend the state gas tax until July 1, saying it would bring immediate relief to Hoosiers as gas prices soar above $4 a gallon .
With about $5 billion in state reserves, Democrats said the state could overcome the estimated $300 million loss.
“We thought we could invest the money wisely and move the state forward,” said Minority Leader Phil GiaQuinta, D-Fort Wayne. “We think the Republicans made a mistake by not reducing the gas tax.”
Democrats also criticized the bill for providing minimal tax relief to Hoosiers when funds could be spent to invest in areas of human infrastructure such as preschool or higher education.
Still, GiaQuinta and her Senate counterpart, Sen. Greg Taylor, D-Indianapolis, said their caucuses had achieved successes, including defeating Bill 1134, which educators say would limit their ability to teach about the race. in class. Proponents said it provided transparency for parents.
“Teachers did a great job being here, but if (Republicans brought it) this year, they’ll bring it back again, so teachers (shouldn’t) sleep on it,” Taylor said.
Although the 2022 legislative elections have just ended, lawmakers could return to the capital before the start of the 2023 session in January.
More than 100 lawmakers have signed a letter to Governor Eric Holcomb urging him to call a special legislative session if the U.S. Supreme Court overturns Roe v. Wade. The Supreme Court is expected to issue a decision in June.