Plan Will Return $1 Billion To Indiana Taxpayers—But With What Effect On Inflation?
- By Zachary Roberts, TheStatehouseFile.com
INDIANAPOLIS—Gov. Eric Holcomb announced Thursday a plan to return $1 billion of state reserves to Hoosier taxpayers. It has received support from both Indiana Republicans and Democrats but gives a Ball State economics professor concern.
The plan would give each taxpayer roughly $225—in addition to the $125 automatic taxpayer refund, they are already receiving. The money would be deposited directly into the bank accounts of taxpayers. Those who receive paper checks would have their checks issued in August.
This comes after the state’s reported revenues for May were $209 million over forecast and the other 11 months of the year reported revenues of $1.075 billion over.
Holcomb announced he is working with Speaker of the House Todd Huston and Senate President Pro Tem Rodric Bray to call a special session before the end of June so they can take action with this plan.
“Hoosiers have real needs right now during this period of high inflation, from the gas pump to buying groceries, and everyone should benefit from the state’s success,†said Holcomb.
Huston provided his reasoning for supporting the special session, saying, “Inflation is having real and negative effects on everyday Hoosiers, whether it’s record gas prices or rising grocery and energy bills. That’s why I fully support the governor’s call for a special session to put more money directly back into taxpayers’ pockets.â€
The plan has also received some support from the Indiana Democratic Party, but the party wants more.
Executive director of the Indiana Democratic Party, Lauren Ganapini, referred to the plan as a “bare-minimum bandaid for Indiana’s long-term problems†and criticized the amount of time it took for the Republicans to act.
“It’s encouraging to see Gov. Holcomb and Indiana Republicans finally realize that there are ways the state government can combat global inflation,†said Ganapini.
Despite the popularity of the governor’s proposition, this reimbursement could make inflation worse and add “additional fuel to the fire,†according to Dr. Michael J. Hicks, a distinguished professor of economics and director of the Center for Business and Economic Research at Ball State University.
He said this is because inflation happens when there is an excess supply of money in the economy, and inserting another billion dollars could substantially increase inflation for the next 12-24 months.
Hicks said he was surprised that state-elected officials decided to take action on this, given that most people do not blame them for inflation but rather Congress at the federal level.
Redistributing this billion-dollar surplus back into the economy would be the “opposite of what economics would teach,†but he says it is popular because it is “pandering to a lack of understanding†voters have when it comes to inflation.
According to Hicks, there is really nothing officials at the state level can do to combat inflation.
FOOTNOTE: Zachary Roberts is a reporter for TheStatehouseFile.com, a news website powered by Franklin College journalism students.Â
The City County Observer posted this article without bias or editing.
Ain’t no taxpayers I know of has recieved the first $125 as of yet.
Let me get this right, the inflation is caused by the printing of over 20 trillion dollars pushed into the economy and into other countries. So the money that already exists, is sent back to be respent will cause inflation? Anybody with common sense should understand that money doesn’t appear out of thin air. Equal and opposite reactions people…
To me it makes more sense to leave the money in a “rainy day fund” for a true state emergency, or allot more towards education. Let’s end the mindset of “if you have money in the bank you need to needlessly spend it”.
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