Rep. Ed DeLaney: We owe our taxpayers more than pies in a future sky

Sometimes, it takes just a few words to say it all. Here is the official summary of Senate Bill 451, which just left the Indiana Senate on a vote of 49-0:

“… Provides for a decrease in the individual adjusted gross income tax rate beginning in 2030 depending on certain conditions being met.”

That’s right, beginning in 2030 you might see your Indiana individual income tax rate drop 0.05%, and it might drop another 0.05% in 2032. Now, to the convoluted “conditions” that must be met as referred to in the summary. The bill’s fiscal impact statement states, “… provides for a reduction of the state Individual Income Tax rate if the revenue collections for the fiscal year are at least 3% above the revenue collections for the prior fiscal year.” Pretty simple.

So, what the 2025 General Assembly is effectively doing is legislating on behalf of its as-yet-unelected 2030 members. We know the future! What if there were a dramatic economic event undercutting state revenue followed by a rebound? Hopefully, the 2030 Legislature would act responsibly and stop the preordained tax cut ordered by us in 2025. But in the Republican world, delaying or deferring a tax cut is always called a tax increase and results in a contest in the next primary election.

Let’s be clear about the impact of SB Bill 451. Indiana stands to lose $76 million in revenue by cutting the income tax in 2030. By 2032, the loss would be $246 million. I’m not prepared to speculate on the continued impact if the “conditions” of the bill are met repeatedly. Let’s just say it would be huge. And of course, Medicaid might be out, while the well-off would do well.

Much of my criticism is just a fancy way of saying we cannot predict the future of Indiana’s economy. You get the picture. One does not act five years in advance unless you are playing the futures market and have money to lose.

SB 451 would be laughed at if it were a business plan. A normal business would not schedule a revenue cut five years out and hope that costs fell, leaving a profit. Would any business ignore the impact on future investment of such planned price cuts? Please let me know if there are such firms, and I can sell their stock short.

Importantly, SB 451 seems intended to be sure that we can make no investments in universities, health care, parks or schools. How about our local roads? A cynic might suggest the bill is intended to choke off investment.

Now, why would we do this? Why are the lemmings going over a cliff on this idea? Well, there is a general lack of thought given to the matter. Lemmings do run in a herd and hope the leader knows what he is doing. But the real reason is that the supermajority’s true focus is on bragging about tax cuts. This mantra never goes away. It is a politician’s dream to make promises, win elections and be long gone when the bill comes due.

I, for one, will not fall for this ploy. We owe our taxpayers more than pies in a future sky. We need to invest in our future, not strangle its funding.•

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DeLaney, an Indianapolis attorney, is a Democrat representing the 86th District in the Indiana House of Representatives. Send comments to ibjedit@ibj.com.

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