HB 1001 – State Budget
Authored by Rep. Tim Brown (R-Crawfordsville)

The budget bill appropriates money for the operation of the state, K-12 and higher education, the delivery of Medicaid and other services, and various other distributions and purposes.

Chamber position: Support in Part

The latest: The Senate Appropriations Committee took public testimony on the budget this week. After earlier meetings to consider budget requests from state agencies and higher education institutions, it was everybody else’s turn to weigh in with their requests and concerns about the state budget. K-12 related issues were heard separately last week by the School Funding Subcommittee. This means the Appropriations Committee is nearing the point where it will unveil its version of a desired budget. After multiple hearings, the committee will digest all it has taken in, make the adjustments that reflect its priorities and produce a new budget with the changes its members concluded need to be made. Then, of course, it all becomes a negotiation between the fiscal leaders in the House and the Senate, with the influential input of the administration.

Indiana Chamber action/commentary: While indications are that the Senate Republican caucus is reluctant to include a cigarette tax increase, the Chamber took the opportunity to testify on the budget by focusing primarily on the need to significantly increase Indiana’s cigarette tax in order to deter and reduce smoking in the state. As we pointed out, Indiana’s populous has the fourth highest smoking rate in the country, and the consequence is a cost to Hoosier employers of $6.2 billion a year. Our testimony explained that our objective is to reduce the consumption of tobacco products, and that studies reveal that a substantial tax increase would be the most effective way to further that cause. We made it clear that the motivation and impetus to act is the health of Hoosiers. But make no mistake that if we raise the cigarette tax to $2 a pack, tax vaping products and in the process make us a healthier state, it also will save money that is being wasted on higher health care premiums and additional Medicaid expenses.

The Chamber will continue to make the taxation of tobacco and vaping products a priority. But we will also be advocating on several other important items that will be sorted out in the final budget negotiations.

During his media availability later yesterday afternoon, Senate President Pro Tem Rod Bray (R-Martinsville) announced that his caucus’s budget plan, set for release next week, would not include a cigarette tax – not even the incredibly modest 50-cent hike put forth by the House in its budget bill.

Indiana has not seen its cigarette tax increase since 2007 while other states around us have adjusted. Even Kentucky, with its rich tobacco history, has a higher tax ($1.10) than ours, which sits at just under a dollar at $0.995. The national average for a cigarette tax is now over $1.80 per pack.

The Senate’s complete lack of acknowledgment of the state’s health woes brought on by tobacco use is bewildering, but that chamber is consistent in its hesitancy to raise taxes of any kind. We are currently consulting with our coalition members in the Alliance for a Healthier Indiana on what our next moves might be this session.

On a positive note, Bray did indicate a desire to impose a new tax on e-cigarettes to bring them in line with the tax on traditional cigarettes.

A final point to remember: The budget bill is traditionally the last bill that passes before the session concludes, which is being targeted for April 21 – less than three weeks away.

Resource: Bill Waltz at (317) 264-6887 or email: bwaltz@indianachamber.com