Indiana’s state revenue forecast projected that the next budget cycle will fall by nearly $2.4 billion, and the General Assembly has less than one week to determine where cuts will be made in its two-year budget and find new potential sources for income.
At Monday morning’s House conference committee meeting for HB 1001, Rep. Gregory Porter, D-Indianapolis, said that the assembly will need to be more creative if it plans to finish the budget on time.
“Everybody needs to come together and be at the dinner table. … And I hope that the Democrats can eat at the dinner table and not at the kids’ table,” he said. “At this point, I’m looking at what occurred back in 2008-2009.”
In 2009, the Indiana General Assembly called a special session due to a $763 million deficit resulting from the Great Recession, and there is talk that this year’s multi-billion dollar deficit has the ability to trigger another special session.
Reporters at a press conference after the meeting asked Porter, why not just let the Republicans do the work and take full responsibility of the budget results.
“In good conscience, our people sent us here to work for them in the House and the Senate, and we want to work for our constituents,” Porter said “We’re talking about the state of Indiana and our future, and that’s an issue that we have a tendency to forget.”
Porter and other Democrats on the committee proposed numerous solutions to remedy the budget, including increasing taxes on cigarettes, gaming and alcohol.
Rep. Mike Andrade, D-Munster, offered an idea to tax fireworks.
“Up in Lake County, we have a big, big, big revenue when it comes to fireworks and the sales that increase up there,” he said. “If you’re buying fireworks and you’re out there just blowing them off, you’re just blowing off money. So, why don’t we tax it?”
Andrade also pointed out that Indiana is losing dollars to neighboring states because it is one of the only states left that has yet to make an approach to legalize marijuana. Twenty-one states currently have a recreational marijuana tax in effect, and in Illinois, the tax revenue for marijuana is $500 million.
“We have some tough decisions to make,” said Sen. Ryan Mishler, R-Mishawaka. “I said earlier that K-12 is our last resort, but we’ve had a lot of discussion over the weekend, and I think we’ve made a lot of progress.”
After the meeting, Sen. Fady Qaddoura, D-Indianapolis, expressed his frustration over the idea that “secret discussions” happened over the weekend.
“I was extremely disappointed today that what would have been or should have been a public process to discuss the budget … did not occur,” he said. “We are a public institution serving six million individuals across the state, and the budget process should have been much more transparent.”
Stating that the supermajority ran too close to the edge, Rep. Edward DeLaney, D-Indianapolis, shared a passionate statement.
“I think we need to protect our public, and we need to correct our mistakes. It’s just that simple,” he said. “We need to deal with fiscal reality, not fiscal fantasy and not the symbolic tax cuts.
“We don’t seem to want to tax cigarettes, gaming and alcohol the way we used to do and the way we know how.”
Tiffany Nichols, advocacy director for the American Lung Association, presented strong data as an incentive to raise the tobacco tax.
“Indiana cigarette tax has not been raised since 2007 and remains the lowest at .995 cents per pack,” Nichols said.“A $2 cigarette tax increase would not only prevent thousands of Hoosiers from dying of tobacco-related deaths but also generate nearly $371 million in annual revenue that could support tobacco provisions, Medicaid and other budget shortfalls.”
According to Campaign for Tobacco-Free Kids, Indiana is ranked 39th in average state cigarette tax.
“Other tobacco products such as cigars, smokeless tobacco, and e-cigarettes are taxed slightly lower or not at all,” Nichols said. “This price gap encourages people, especially our young people, to switch to those alternative products instead of quitting or not starting. We must close this loophole.”
Qaddoura weighed in on what he believes would be the four best “bipartisan, commonsense” solutions to the budget decrease. He listed them as increasing the cigarette tax, increasing the Managed Care Assessment Fee, delaying the income tax reduction and not expanding the voucher program.
“This is not a political game for us,” he said. “There are lives that will be impacted by this budget, and it’s my intention to continue to demand responses from my Republican colleagues.”
The General Assembly is required to complete work no later than April 29.
