Local Lawmakers Support $1 Billion Tax-Relief Package For Hardworking Hoosiers
STATEHOUSE (March 10, 2022) – Local lawmakers recently voted in support of passing the largest tax cut in the state’s history, sending the $1 billion tax-relief package to the governor where it could soon become law.
According to State Rep. Tim O’Brien (R-Evansville), co-author of House Enrolled Act 1002, this legislation will drop the state’s individual income tax from 3.23% to 2.9% over seven years. He said once fully phased in, Indiana would have one of the lowest income tax rates in the nation.
“Indiana’s booming economy is a result of hardworking Hoosiers and conservative policies over the past few years,” O’Brien said. “Rather than grow the size of government, I believe the right thing to do is give money back to taxpayers.”
The bill will also help lower utility bills for Hoosiers and businesses by eliminating the 1.46% Utility Receipts Tax currently paid on electricity, natural gas, water, steam, sewage and telephone bills.
“Providing a way for Hoosiers to save money is something we take very seriously,” said State Rep. Cindy Ledbetter (R-Newburgh). “Utility bills can really impact family budgets and be a significant expense, so reducing that for Hoosiers can make a real impact.”
Ledbetter said once both tax cuts are fully implemented, Hoosiers would save over $1 billion a year.
State Rep. Wendy McNamara (R-Evansville) said the legislation also includes using reserves to make a one-time, $2.5 billion payment toward pre-’96 teacher pension obligations. This comes after Indiana has paid down well over $1 billion in debt over the last year alone.
“Paying down debt is a top priority,” McNamara said. “This gives us additional flexibility in the coming years to explore future tax cuts.”
House Enrolled Act 1002, a priority for Republican lawmakers, comes as the state’s budget reserves are expected to hit a record $5 billion at the end of fiscal year 2022. As revenues continue to outpace expectations, Hoosier taxpayers can expect a $125 refund this spring as part of a combined refund of over $545 million. A new law will ensure the maximum number of Hoosiers qualify for the refund.
“Hoosier families are dealing with rising costs at every turn,” said State Rep. Matt Hostettler (R-Patoka). “Every little bit helps and this automatic taxpayer refund will provide relief for households across our state.”
