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GOP preaches caution despite more than $1 billion projected revenue

By Brandon Smith

Posted December 15, 2022

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Legislative fiscal leaders Sen. Ryan Mishler (R-Bremen), left, and Rep. Jeff Thompson (R-Lizton), right, are preaching caution when it comes to new spending in the upcoming state budget. (Brandon Smith / IPB News)

A new state revenue forecast projects that Indiana lawmakers will have about $1.6 billion in new money to spend in the 2023 session.

Yet Republican fiscal leaders are already preparing to say no to a lot of budget requests.

The forecast says for the new state budget, the state is projected to increase revenue by a two-year total of $1.2 billion – even with a mild recession predicted next year.

Senate GOP budget architect Ryan Mishler (R-Bremen) said that seems like a lot. But he noted that Indiana state agencies have already asked for a total of $700 million a year in new spending.

“And we haven’t even discussed member requests, K-12 tuition support or higher ed," Mishler said. "So, I think we need to be very cautious as we move forward. We’ll work with what we have.”

Mishler also said construction projects approved in previous budgets have gotten a lot more expensive because of inflation. He predicts an additional $1 billion needed just to finish those projects.

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Democrats said state finances should weather any economic downturn. And they argued that long-term economic growth requires significant investments now in public health and education.

Rep. Greg Porter (D-Indianapolis) also said Republicans have boxed themselves in because of tax cuts passed in the 2022 session. Republicans eliminated two taxes that show up on your utility bills.

For the average Hoosier household, that amounts to maybe $1 or $2 a month in savings. But Porter said it was a windfall for big businesses with large electric bills.

"It would be a real shame if we are not able to fully fund the recommendations made by the Governor's Public Health Commission, which annually come to nearly the same amount as the utility receipts tax revenue, because of a corporate giveaway," Porter said.

The Public Health Commission's recommendation originally proposed $240 million per year in increased public health funding. That request has since come down to $120 million in the first year of the new state budget and $227 million in the second year.

The utility tax elimination costs the state a little more than $220 million per year.

Republicans have already said they'll explore new tax cuts in the upcoming session, including potential property tax reform.

Mishler said the revenue forecast doesn't change that.

"If you want to cut the revenue, then you're going to have cut the spending," Mishler said. "So, I guess, we just have to put our priorities out there to see where we're going to be and balance it out."

The legislative session is set to begin Jan. 9.

Contact reporter Brandon at bsmith@ipbs.org or follow him on Twitter at @brandonjsmith5.