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Indianapolis Star
23-04-2025
- Business
- Indianapolis Star
Indiana state budget deal: Cigarette taxes go up, public health funding goes down
Show Caption Indiana lawmakers and Gov. Mike Braun have reached a deal on the two-year state budget that's slimmer than what they began with ― but boosted by a $2 increase in the cigarette tax. Legislative leaders had to go back to the drawing board last week after the latest revenue forecast showed a $2 billion drop in expected revenue over the course of the upcoming biennium. This new version cuts public health funding by more than half, dips a bit more into reserves, and adds new revenue from the tobacco taxes, which amount to about $800 million over the biennium. They presented the outlines of the deal in a press briefing the afternoon of April 23, but the actual budget has not yet been posted. Lawmakers will likely vote on the final budget the evening of April 24. "We used to think that when you were relatively flush with cash, that's a challenging budget to craft, and maybe harder than when you're short with cash. I'm not sure that I feel that anymore," Senate Pro Tempore Rodric Bray, R-Martinsville, said. "Trying to come up with a way to fund the budget with a $2 billion shortfall in the official forecast is, frankly, one of the more challenging things I think we've ever done." The massive difference in the April forecast compared to December stems from a number of federal policy actions, from tariffs impacting trade and the stock market to deep federal spending cuts. It also partly reflects a return to normal revenues following a period of exceedingly high revenues during the COVID-19 pandemic era. New revenue in the budget Sen. Ryan Mishler, R-Mishawaka, said the final budget increases the cigarette tax by $2 a pack, which would take the tax from $1 to $3 a pack. He said the tax on other tobacco products will also increase "by the same percentage," which would be a tripling. The roughly $400 million per year that this will raise will go entirely to the Medicaid budget, he said. This is something that advocacy groups and the Indiana Chamber, specifically, have advocated for a long time as a way to raise revenue while discouraging people from tobacco use. The House has pitched it in the budget a few times, but the idea has usually died in the Senate. Democrats, too, have suggested it. "Along with revenue comes a really pretty good public policy that was going to help persuade people to either not start smoking or stop smoking at the same time," Bray acknowledged. "So I think everybody expects that number will decrease over time. But that's a good thing, because we think it means we have fewer smokers." What is getting cut Without seeing the specifics of the bill or its fiscal analysis yet, here are some cuts leaders described: Funding for county public health departments, which focus on preventative health care and education, will be funded at $40 million a year, down from $100 million a year. The House wanted to expand the school voucher program to be universal in this budget, and the Senate didn't. They will both get their wish: Universal vouchers will kick in during the second year only. Higher education funding will get slashed an additional 5%, as will the repair and rehabilitation budget, which pays for capital projects. They "did away with some of those" commissions who haven't met in a while and had "big cash balances." They didn't specify which ones. The new deal also dips into reserves more. While the Senate and the House budgets proposed leaving roughly 12-13% of the budget in reserves, this one will leave "a little north of 10%," Bray said. That could equate to a difference of about half a billion dollars, depending on the exact percentages. The decision to cut public health spending while at the same time expanding voucher options for the richest families is one of the largest disappointments for Democrats, Rep. Greg Porter, D-Indianapolis, said. "Is that making Indiana healthy again? I think it's making us extremely vulnerable," he said. Bray said that close to half of the money counties got in 2024 went unspent, so he thinks some counties are still trying to roll out their programs. "While that's a cut I'm sure they'll be disappointed in, they're also continuing to try to build this up," he said. "We want to continue to try to invest in that." Overall, the state budget will grow 0.8% in 2026 and another 0.1% in 2027. By comparison, local governments are projected to have 1.6% increases in the first year and 5.1% in the second year.
Indianapolis Star
23-04-2025
- Business
- Indianapolis Star
Indiana state budget deal: Cigarette taxes go up, public health funding goes down
Indiana lawmakers and Gov. Mike Braun have reached a deal on the two-year state budget that's slimmer than what they began with ― but boosted by a $2 increase in the cigarette tax. Legislative leaders had to go back to the drawing board last week after the latest revenue forecast showed a $2 billion drop in expected revenue over the course of the upcoming biennium. This new version cuts public health funding by more than half, dips a bit more into reserves, and adds new revenue from the tobacco taxes, which amount to about $800 million over the biennium. They presented the outlines of the deal in a press briefing the afternoon of April 23, but the actual budget has not yet been posted. Lawmakers will likely vote on the final budget the evening of April 24. "We used to think that when you were relatively flush with cash, that's a challenging budget to craft, and maybe harder than when you're short with cash. I'm not sure that I feel that anymore," Senate Pro Tempore Rodric Bray, R-Martinsville, said. "Trying to come up with a way to fund the budget with a $2 billion shortfall in the official forecast is, frankly, one of the more challenging things I think we've ever done." The massive difference in the April forecast compared to December stems from a number of federal policy actions, from tariffs impacting trade and the stock market to deep federal spending cuts. It also partly reflects a return to normal revenues following a period of exceedingly high revenues during the COVID-19 pandemic era. New revenue in the budget Sen. Ryan Mishler, R-Mishawaka, said the final budget increases the cigarette tax by $2 a pack, which would take the tax from $1 to $3 a pack. He said the tax on other tobacco products will also increase "by the same percentage," which would be a tripling. The roughly $400 million per year that this will raise will go entirely to the Medicaid budget, he said. This is something that advocacy groups and the Indiana Chamber, specifically, have advocated for a long time as a way to raise revenue while discouraging people from tobacco use. The House has pitched it in the budget a few times, but the idea has usually died in the Senate. Democrats, too, have suggested it. "Along with revenue comes a really pretty good public policy that was going to help persuade people to either not start smoking or stop smoking at the same time," Bray acknowledged. "So I think everybody expects that number will decrease over time. But that's a good thing, because we think it means we have fewer smokers." What is getting cut Without seeing the specifics of the bill or its fiscal analysis yet, here are some cuts leaders described: Funding for county public health departments, which focus on preventative health care and education, will be funded at $40 million a year, down from $100 million a year. The House wanted to expand the school voucher program to be universal in this budget, and the Senate didn't. They will both get their wish: Universal vouchers will kick in during the second year only. Higher education funding will get slashed an additional 5%, as will the repair and rehabilitation budget, which pays for capital projects. They "did away with some of those" commissions who haven't met in a while and had "big cash balances." They didn't specify which ones. The new deal also dips into reserves more. While the Senate and the House budgets proposed leaving roughly 12-13% of the budget in reserves, this one will leave "a little north of 10%," Bray said. That could equate to a difference of about half a billion dollars, depending on the exact percentages. The decision to cut public health spending while at the same time expanding voucher options for the richest families is one of the largest disappointments for Democrats, Rep. Greg Porter, D-Indianapolis, said. "Is that making Indiana healthy again? I think it's making us extremely vulnerable," he said. Bray said that close to half of the money counties got in 2024 went unspent, so he thinks some counties are still trying to roll out their programs. "While that's a cut I'm sure they'll be disappointed in, they're also continuing to try to build this up," he said. "We want to continue to try to invest in that." Overall, the state budget will grow 0.8% in 2026 and another 0.1% in 2027. By comparison, local governments are projected to have 1.6% increases in the first year and 5.1% in the second year.
Yahoo
14-03-2025
- Business
- Yahoo
Raising Indiana's cigarette tax just makes sense
Indiana's current cigarette tax is 99.5 cents per pack, and a perennial proposal would raise it to $2 a pack. (Getty Images) When a proposal has both a fiscal and health upside you would think it would be popular. But pushes to raise Indiana's cigarette tax have faltered for years. Now is the time to pull the trigger. 'Indiana is an unhealthy state, and one of the big culprits is Hoosiers' high tobacco usage. This impacts the productivity of our workforce, healthcare costs and future economic prosperity in our state,' said Vanessa Green Sinders, the Indiana Chamber of Commerce's president and CEO. 'So, it's disappointing that raising the state's very low cigarette tax is again not getting the buy-in needed, especially when you consider that the tax rate hasn't changed in 17 years and the state has the 11th highest adult smoking rate in the nation,' she said. This is something that we should all be able to agree on.' CONTACT US Indiana's current cigarette tax is 99.5 cents per pack, and a perennial proposal would raise it to $2 a pack. A fiscal analysis shows the $1 increase would bring in about $205 million in the first year. The House has passed it several times, with the Senate blocking it repeatedly. This year, House leadership rightly deferred to the Senate to put that tax into the state budget. And Senate President Pro Tem Rodric Bray at least sounds more open to it than usual. He acknowledged how lean the revenue and budget picture is for the next years. 'That's a challenge. We also have other challenges with Medicaid that is continuing to rear its head,' Bray said. '(It's) probably more on our thought list now than it has been in the past. So yeah, I think it's part of the conversation.' He added that lawmakers won't pass it to simply continue to grow the Medicaid program. 'That's not productive work for us. So that's not how we're going to go about it. But yeah, it is part of the conversation right now,' he said.' Indiana is drowning in health care costs as its Medicaid budget has exploded at an exponential rate. One of the key priorities for the session is to try to contain those costs. Senate Republicans passed a bill to reduce Indiana's Healthy Indiana Plan, which is the Medicaid expansion population added in 2015 under then-Gov. Mike Pence. They have repeatedly implied that these Hoosiers aren't eligible for the taxpayer-paid coverage. They call it 'right-sizing' the program. That's just a nice way to say they are taking insurance away from upwards of 250,000 Hoosiers. Poor Hoosiers. If this tax increase could keep even some of those Hoosiers covered and out of emergency rooms, it would be a win. But the fact is, a cigarette tax increase wins in more ways. That's because cigarette taxes have the added bonus of getting people to quit smoking. And this lowers health care costs for all of Indiana. The American Lung Association said increasing taxes on all tobacco products, including e-cigarettes, is one of the most effective ways to reduce tobacco use, especially among youth. Multiple studies have shown that every 10% increase in the price of cigarettes reduces consumption by about 4% among adults and about 7% among youth. They advocate a $2 increase per pack. A 2022 study showed that cigarette smoking rates among adults by state ranged from a low of 6.7% in Utah to a high of 21.0% in West Virginia. Indiana came in at 16.2%. And what does that ultimately mean? Smoking causes $3.4 billion in health care costs each year in Indiana. I could go on, but it's clear Indiana has a real problem. Raising the cigarette tax can reduce that number and help Indiana's financial picture. I don't see the downside. SUBSCRIBE: GET THE MORNING HEADLINES DELIVERED TO YOUR INBOX
Yahoo
31-01-2025
- Politics
- Yahoo
Legislative leaders talk post-moratorium gambling expansions, more bills reach halfway point
The General Assembly's GOP leaders answer reporter questions after the State of the State Address on Wednesday, Jan. 29, 2025. From left: Senate President Pro Tempore Rodric Bray, House Speaker Todd Huston. (Leslie Bonilla Muñiz/Indiana Capital Chronicle) Just six months after a former Indiana lawmaker was sentenced to a year in federal prison for gambling-related corruption, industry expansion proposals are moving through the Legislature. The state's top two lawmakers say despite the controversy, they can't ignore the industry any longer. Last session, they agreed to take a break from legislation. 'I have no defense of my former colleague,' Republican House Speaker Todd Huston told reporters on Thursday. Ex-Rep. Sean Eberhart was nabbed for accepting a lucrative job opportunity with a gambling company Spectacle Entertainment in exchange for supporting legislation in 2019 – and pushing for advantageous changes – that benefited the company. Another former lawmaker was sentenced in 2022 for gambling-related election finance schemes. Still, Huston said, 'We just can't stand still … Like any … industry that is an important component of our state, there should be continual discussions about what ends up happening.' His caucus isn't standing still. A House GOP bill legalizing online lottery and casino gambling – which could quickly earn casinos and the state millions – advanced through committee on Tuesday. So did legislation allowing taverns, charitable organizations and others to use electronic pull tabs. Senate President Pro Tempore Rodric Bray said that Eberhart's conviction 'never leaves my mind' when it comes to bills concerning the gambling industry. He added that lawmakers need to be particularly mindful about such legislation and its impacts. 'Obviously, gaming is a big industry in the state of Indiana … a challenging industry, but an industry that's very helpful to the state of Indiana,' Bray said. But when it came to expansions, such as iGaming, Bray said he put more emphasis on good policymaking over whether an action could bring in additional revenue. Leaders have urged their colleagues to be fiscally restrained this budget cycle after a December forecast predicted only moderate growth over the next two years. 'I don't think it's good policy to chase revenue. I think you have to decide what the right policy is and then maybe the revenue comes,' Bray said. 'But if you're chasing revenue that way, you're probably not making good policy decisions.' A Senate bill allowing the relocation of a casino license is facing a tougher path. The author pulled the bill during committee on Wednesday, then told the Capital Chronicle that he doesn't intend to allow a vote, citing strong opposition. In the House, lawmakers unanimously approved legislation on the state's red flag law and school absenteeism after tussling over charter changes to an education deregulation proposal. House Bill 1137, which makes it easier to expunge red flag law records, moved on a 91-0 vote. The law allows police to temporarily remove firearms from people considered 'dangerous,' in an effort to prevent gun violence. But for people who are eventually found harmless, the records of the process don't go away. 'The problem is: that is never expunged from your record, because it's a civil action and it becomes a sort of a scarlet letter,' said author Rep. Ben Smaltz, R-Auburn. Prospective employers may research job candidates and find the records, but not see that the applicant was cleared. His legislation would require that, if a court decides someone isn't dangerous, related records must be sealed and expunged. If the court later clears someone who was previously found dangerous, the court can choose to order that the person's records be sealed and expunged. The bill next heads to the Senate for a committee hearing. So does a measure dealing with absenteeism in schools, which advanced on an 87-0 vote. House Bill 1201 requires the Indiana Department of Education to create a list of best practices to reduce student discipline and chronic absenteeism, among other tasks. It also bars schools from suspending or expelling students solely for being habitually truant or chronically absent. Students are considered truant if they miss 10 or more days of school without an excuse; they're labeled as chronically absent if they miss 10% or more of the school year, regardless of whether it is excused. Lawmakers also spent nearly an hour accepting and defeating changes to House Bill 1002, an omnibus education deregulation measure and a priority for the House Republican caucus. It repeals, loosens or eliminates some existing requirements related to teacher training, professional development, school programming, administrative duties, and school boards, among other changes. It also deletes some expired education provisions. Among the accepted amendments was one ditching annual performance requirements for charter schools and economic disclosure mandates for charter board members. Over in the Senate, a bill placing conditions on fishing practices related to minnows easily passed the chamber on a 44-4 vote, with two Democrats and two Republicans nixing the measure. Minnows may be caught with a net and used as bait under current law, but certain immigrant communities have allegedly fished not just for sport but also for consumption. 'Individuals are using nets in ways that are incredibly harmful … (and) just decimate sections of water,' said author Sen. Spencer Deery. The West Lafayette Republican introduced his legislation with praise for immigrants but warned that 'inadequate assimilation' could be detrimental. The legislation would make it easier for conservation officers to restrict minnow trapping and protect fish populations, he said. The bill now moves to the House. Senior Reporter Casey Smith contributed. SUPPORT: YOU MAKE OUR WORK POSSIBLE
