Last time I wrote, I gave a breakdown of what I felt were the highlights of the House proposed budget. The budget has now been passed through the House and has moved onto the Senate for further debate. When crafting the House budget, we kept in mind sustainability for the future and funding for key priorities like roads and public education, all the while continuing to live within our means and not spend more than we take in. These principles provide the best financial foundation for Indiana and protect Hoosier taxpayers.
The House proposed budget is conservative and prudent. It prioritizes paying off long term debt and getting our bonded indebtedness back down to traditional, historic levels. We also focus on creating healthy reserves which will protect Hoosier families against future tax increases. At the end of fiscal year (FY) 2014, Indiana will have a combined revenue balance of $1.9 billion and $2.1 billion the following year. These reserves are an important part of ensuring that we will be prepared to weather another recession.
Indiana currently has an inheritance tax, or “death tax,” in place which was scheduled to be phased out by 2022. The House budget calls for this tax to be eliminated by 2018. This four year acceleration will save Hoosier taxpayers nearly $300 million. As I have expressed before, this will keep more farms and small businesses in the hands of Hoosiers and encourage more Hoosiers to stay in Indiana after they retire.
Over the past 15 years, Indiana has cut taxes over 10 times. We have a proven track record, are good fiscal stewards and use a conservative approach to handling taxpayer’s money. Our goal is to have Hoosiers keep more of their hard-earned money, not increase the size and scope of government by spending more.
In 2011, Indiana gave $360 million back to taxpayers and another $360 million to support pensions in the first ever automatic taxpayer refund. By repealing the corporate income tax, the inventory tax and the sales tax on research and development equipment, Indiana has become a beacon for business and technology. This past year, the Indiana Economic Development Corporation worked with 256 companies that made decisions to expand or establish new business operations in Indiana. This was an increase from 219 companies in 2011 and more than any other year on record.
Indiana has led the way in cutting taxes and implementing innovative fiscal policies, resulting in more jobs being created than most other states. At a time when many have become disillusioned with the federal government, Indiana’s smart approach to spending has left it lean and responsive to the needs of Hoosiers. Tax cuts have been an important part of our economy, but we must think responsibly and wait for the final revenue forecast in April to make any additional cuts to what is proposed in the House’s budget.
As the Speaker has said, “There will be a tax cut – the question is which tax, how much and when.” In May 2012, Indiana was ranked first in the Midwest and fifth in nation in Chief Executive magazine’s annual survey of the “Best and Worst States.” Indiana truly is the envy of the nation and our number one goal should be to maintain that moving forward.