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As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe NowIt’s easy to forget, given the U.S. Supreme Court’s decision about abortion, that the original reason Gov. Eric Holcomb planned to call the Legislature into a special session July 6 was to talk about money.
Specifically, taxpayer refunds.
The Republican governor has asked lawmakers to send $1 billion back to Hoosier taxpayers, with individuals receiving $225 each. That would be on top of $125 refunds the state is sending out now as part of Indiana’s automatic taxpayer-refund program.
Before lawmakers could commence that special session, however, the Supreme Court ruled that states could make their own rules about abortion. And, so, the special session has essentially been delayed until later this month so Republicans have time to decide what direction to take on that highly controversial issue. But the delay has also given Republicans—who have a supermajority in the House and Senate—time to contemplate Holcomb’s proposed taxpayer refund. We think that’s a good thing. Even in the context of the state’s $36 billion, two-year budget, a $1 billion taxpayer refund is significant, especially in a state with some obvious needs related to talent, education, public health and infrastructure.
As IBJ reporter Peter Blanchard writes in a page 1A story in this issue, some lawmakers (and others) are questioning whether taxpayer refunds are the best use of the state’s immense surplus or whether the money might be better spent closing the state’s teacher pension shortfall. There’s a question, too, about whether a recession could mean the state should hold onto the money to make up for what could be lower tax receipts in the coming year.
It’s a worthwhile conversation. Indiana has more than $5 billion in reserves. This is money that has not been earmarked to pay for an ongoing program, such as education or economic development or social services. It is a collection of funds made up of tax receipts that exceeded annual spending needs, federal pandemic relief grants, cash the state stashed for a rainy day and interest the state earned on that money.
It’s certainly easy to see Holcomb’s motivation in proposing to send some of that money back to taxpayers. Higher prices at the pump, in the grocery store and, well, everywhere are squeezing Hoosier families.
But we remember 2009, when a sudden recession led to a drop in the state’s tax receipts and eventually to cuts by then-Gov. Mitch Daniels in the money allocated to K-12 schools, universities and state agencies overall.
The state is in a much better financial situation now than it was in 2009. And this economic slowdown appears to be rolling out more gradually.
But history is worth reviewing here. So, too, are other big concerns, including how Indiana closes an achievement gap in education, improves public health, retains more college graduates, secures its future water supply, prepares existing workers for jobs of the future, and so much more.
We hope lawmakers spend as much time thinking about those issues as they do whether to change the state’s abortion laws.•
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Before decisions such as spending on the teacher’s pension shortfall, details of the pension should be published conspicuously. Who contributes how much, what is the formula for how contributions are made and who makes the contributions, and why is there a shortfall. Most that work outside of the public sector fund their retirements themselves, sometimes with a very modest company match, usually 5 to 7% or less of what the employee contributes. Many resent the gold-plated public pensions taxpayers fund.