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Lawmakers send $1 billion tax cut package to governor's desk

By Brandon Smith

Posted March 9, 2022

Tax Forms

(Pixabay)

Lawmakers sent a $1 billion tax cut to the governor’s desk in the early hours of Wednesday morning, ending their 2022 session.

The measure makes two major tax reductions. It cuts the individual income tax down to 2.9 percent (from its current 3.23 percent). And it eliminates a pair of utility taxes.

Rep. Tim Brown (R-Crawfordsville), the bill’s author, said the utility taxes will cost the state $200 million a year – and will help Hoosier ratepayers.

“Electric utilities will be required to put on their bill and also calculate rate reductions or decrease in bills to people, to our constituents,” Brown said.

The income tax cut will take place over seven years. And some of that reduction will only go through if state revenues grow by at least 2 percent and Indiana eventually pays off debt in a teacher pension fund.

Rep. Greg Porter (D-Indianapolis) said Republicans didn’t include such triggers when they slashed the corporate tax for several years.

“So why are we doing it to everyday people?” Porter said.

Porter said the legislature should’ve done more to help struggling Hoosiers now – including a temporary suspension of the state gas tax.

The package does not include any reduction in the business personal property tax, which had been part of both House Republicans' and Gov. Eric Holcomb's agenda. Senate Republicans were staunchly opposed to such a cut and held the line on the final deal.

If the governor signs the bill, the utility tax elimination will take effect July 1. And the first cut of the individual income tax won’t happen until January.

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

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