17-02-2025
House Republicans introduce nearly $47 billion spending plan
Budget uncertainty is driving Indiana lawmakers to seriously consider so-called "sin taxes."
Why it matters: Republicans, who have generally opposed any tax increases, signaled during a budget discussion Monday that they would consider raising taxes on cigarettes, other tobacco products and alcohol.
The state is facing revenue constraints, especially in the second year of the biennium budget, and uncertainty at the federal level as President Trump's administration proposes major spending cuts that could impact how much funding states receive.
Driving the news: House Republicans introduced their two-year $46.7 billion spending plan Monday.
It passed the House Ways and Means Committee 14-7, along party lines.
The big picture: House Republicans' proposal is nearly in lock-step with Gov. Mike Braun's budget plan — including on education spending, the largest state expenditure.
It increases the K-12 funding by 2% each year and lifts the income cap on the Choice Scholarships, the state's private school voucher program.
It flatlines higher education funding at the amount schools are currently receiving and doesn't continue appropriations from the last budget for Martin University or the College Success Program.
The bill also rolls $160 million for K-12 curricular materials, which was added to the state budget two years ago as a separate line item, into the overall funding formula.
Yes, but: There are some differences. House Republicans spend about $500 million more in the first year and $380 million more than Braun in the second.
The majority of that increase would go to the Department of Child Services and the Department of Corrections — two of the only state agencies that wouldn't see a 5% cut.
They also didn't include many of Braun's tax breaks, including eliminating the tax on tips and introducing several sales tax holidays but did continue planned income tax reductions.
It also provides an exemption, though, for feminine hygiene products.
Zoom in: The committee accepted one additional amendment, from Rep. Greg Porter, D-Indianapolis, to restore funding for the Civil Rights Commission and the Native American Indian Affairs Commission and to increase the appropriation for the minority health initiative.
It shot down many other amendments, including those to raise the cigarette tax, cover weight loss drugs for Medicaid patients, increase spending for public transit and pre-kindergarten programming and restore funding for Dolly Parton's Imagination Library.
The intrigue: Rep. Jeff Thompson, committee chair and the House's top budget writer, said he hopes to see a cigarette tax increase in the final budget bill.
"I hope we get there," said Thompson, who voted against an amendment that would have done just that.
Between the lines: The Senate has historically opposed raising the tax while the House has been more supportive. Thompson said the tough budget conditions may pave the way this year.
Rep. Ed Delaney, D-Indianapolis, said he'll try again to raise the cigarette tax through an amendment on the House floor this week, and he would also support increases on alcohol and gaming.
What he's saying: "I'd rather tax sin than income," Delaney said.
Rep. Ben Smaltz, R-Auburn, said he thinks the state needs to consider raising the alcohol tax too.
What's next: The budget will hit the House floor for amendments and a final vote later this week.
The Senate will propose its spending plan in the second half of the legislative session.
A compromise budget deal is generally hammered out in the final days of session and could look quite different than what's being proposed now, depending on the final revenue forecast that's due out in April.
