Indiana House republicans use cigarette tax hike to balance budget

INDIANAPOLIS (WISH) – Indiana House republicans are looking to increase the price of a pack of cigarettes to help balance the budget.

It was part of the 2018, 2019 fiscal year budget proposal unveiled Wednesday. The majority of the $31 billion proposal would be spent on education. But it also focuses on workforce readiness, fighting the drug crisis and increasing Indiana State Police pay.

“To have a sustainable path, to have some reserves, I feel very good that this is a budget that everybody can live with in the state of Indiana,” State Rep. Tim Brown (R – Crawfordsville) said.

Not everyone is on board. The proposal received zero democrat support.

“It’s a long time coming,” State Rep. Gregory Porter (D – Indianapolis) said. “This is the 15th of February, and we have a long way to go. However, it is a good starting point.”

The big issue is education. Republicans want to spend close to $15 billion on kindergarten through high school tuition.

They also want to continue to fund a pre-k pilot, pay for ten university projects and offer college financial aid. But democrats want schools to get more money.

“Were also very concerned about how the money is distributed with vouchers, public charter schools, traditional schools and virtual schools,” State Rep. Porter said.

Millions would also go to fight the opioid epidemic. And Indiana State Police would get a 12 percent pay raise.

But republicans had to get creative on revenue. Putting all gas sales tax on roads created a $300 million gap in the general fund.

Their answer is to add a dollar cigarette tax increase, which would generate $287 million. Senate republicans call the use of the cigarette tax problematic.

“I think that’s a plug number to help diminish the problem you get into with the sales tax on gas issue,” State Sen. Luke Kenley (R – Noblesville) said. “So, I’m not convinced that’s the right way to go.”

So far, House republicans said it is. They plan to try to work with their senate colleagues next, and also, try to get bipartisan support with democrats.

“I don’t know exactly,” State Rep. Brown said. “I continue to have conversations. My door is always open.”

“We will have some real stern, some provocative amendments coming forth,” State Rep. Porter said.

We won’t have to wait long to see what the amendments will be. This could come up for a second reading as early as Thursday.

The House plan doesn’t give Governor Eric Holcomb everything he asked for, including money to pay for direct flights at the Indianapolis International Airport. He released a statement to 24-Hour News 8 on the proposal.

“Overall, this is a good looking budget, and I commend Speaker Bosma and Chairman Brown for their hard work to ensure Indiana’s next budget is honestly balanced and maintains healthy reserves. I’m also happy to see that it provides support for key priorities of my Next Level legislative agenda-including economic development, transportation, education, drug addiction prevention and treatment, and government service. I’m encouraged and looking forward to the work ahead as we progress through this long legislative session.”

A House vote on this proposal is expected to take place next week before heading to the senate.

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