House Republicans propose cigarette tax hike to fund budget

By Shelby Mullis
TheStatehouseFile.com

INDIANAPOLIS — Hoosiers could soon pay $1 more for every pack of cigarettes they purchase if Indiana House Republicans move forward with their proposed biennial state budget.

Rep. Tim Brown, R-Crawfordsville, unveiled the $31 billion budget Wednesday, with a cigarette tax hike that would provide the state with an additional $287 million each year.

Rep. Tim Brown, R-Crawfordsville, presents his budget amendment to the House Ways and Means committee Wednesday. If passed, Hoosiers could see a $1 tax hike on every package of cigarettes among other things. Photo by Shelby Mullis, TheStatehouseFile.com

Calling it a step toward improving Indiana’s public health, Brown also said the hike would make it easier to fund roads. The House Republicans’ road funding plan calls for 100 percent of the sales tax on gasoline to support infrastructure construction and maintenance, leaving a $300 million gap in the general fund each year.

Meanwhile, the cigarette tax hike would support the money spent on Medicaid, which is currently funded by the state’s sales tax on gasoline, and efforts to reduce Hoosier smoking rates.

Sen. Luke Kenley, R-Noblesville, said the cigarette tax is “a diminishing resource” and the state could run the risk of needing a general tax increase in the future. Overall, however, he thought the House Republicans did a good job.

“It’s a really substantive, meaty budget that addresses all of the major issues and I understand that their proposal, with respect to the road funding, is very fairly a complete document,” he said. “I think we’re right on the same page.”

Kenley said there is still room for improvement, and is confident he will work out any differences with Brown.

Brown, in unveiling the budget, said education remains the number one priority.

Overall, K-12 education would see a total increase of $273 million over the next two fiscal years in the House Republicans’ current plan.

“Unlike other states, Indiana is inheriting opportunities, not deficits,” Brown said. “While being fiscally prudent, the largest funding increase in this budget is dedicated to supporting education and helping all students.”

Both the Republican budget and Gov. Eric Holcomb’s budget designated $20 million per year for the state’s pre-K pilot program.

The House plan did not provide funding for the teacher bonuses that Holcomb’s budget called for.

The money that the governor proposed for teacher bonuses would go to the education foundation fund, which Brown said aims to accommodate the needs of every student across the state.

The state allocates a standard amount of money to each school district based on the number of students enrolled. Diverting the bonus money to the foundation fund would provide more money for schools.

The House GOP budget does not set aside funding for direct flights to Indiana, as the governor proposed.

Holcomb called the Republicans’ proposal a “good looking budget,” but did not comment on the items he proposed that had been left out of the House version.

House Speaker Brian Bosma, R-Indianapolis, also supported Brown’s plan Wednesday. He said it serves as a way for Indiana to “maintain reserves and preserve our AAA credit rating.”

The budget also provides for an increase in Indiana State Police salaries and allocates funds to address Indiana’s opioid epidemic. It also funds the creation of Holcomb’s appointed drug czar.

“Our honestly balanced budget works to meet the needs of Hoosiers while remaining fiscally responsible,” Brown said. “We fund key priorities like education and public safety while retaining healthy reserves and supporting our top-rated business climate. This budget also works alongside our long-term road funding plan, which holds firm to our proven commitment to conservative principles and won’t burden future generations with debt.”

House Democrats voted against Brown’s proposal Wednesday in the Ways and Means Committee. Rep. Greg Porter, D-Indianapolis, said he appreciates the work completed on the budget, but said it’s not quite where it needs to be.

Committee members will offer amendments to the budget and vote Thursday.

Shelby Mullis is a reporter for TheStatehouseFile.com, a news website powered by Franklin College journalism students.

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