[r32] Largest tax cut in Hoosier history (4/27/2013)

Saturday, April 27, 2013

Start Date: 4/27/2013 Start Time: 12:00 AM
End Date: 4/27/2013 End Time: 1:59 AM
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.

“Indiana is consistently ranked among the top states in the country to do business, which is a testament to the character of Hoosiers and the state’s collective ability to take on any and all challenges,” said Rep. Kathy Kreag Richardson (R-Noblesville). “This session, we wanted to keep the momentum going in our state to continue to attract jobs and people to live here and raise a family. The budget put forth by the General Assembly is a tremendous step forward as the strategic investments made will benefit Hoosiers for years to come.”

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
“Jobs and education were the General Assembly’s top priorities this session. The next budget for Indiana keeps the state on a conservative path by providing a historic tax cut, additional funding for education and infrastructure and less of a debt burden for future generations,” said Rep. P. Eric Turner (R-Cicero). “As a member of Ways and Means, our goal was to chart a course for the state that put more money in the pockets of taxpayers, while always having prudent reserves in place for critical government functions. After four months of work, we have succeeded in accomplishing these tasks for the betterment of our state, now and in the future.”