Taxes could go up in Indiana

("Indiana Statehouse" by Shawna Pierson, CC BY 2.0)

INDIANAPOLIS (Network Indiana): You should be looking for the state to try and make up for some serious budget shortfalls in ways that might involve your money in one way or another. That could mean raising taxes.

“A three to four billion dollar shortfall over this two-year budget is a pretty big hole to dig ourselves out of,” said Chris Watts with the Indiana Fiscal Policy Institute.

Watts said in the federal government, lawmakers would authorize the printing of money or would budget regardless of the debt. In Indiana, it’s not possible for lawmakers to do that.

“We have a balanced budget amendment here and can’t just issue debt to cover these things,” said Watts. “So, any shortfall that we run we have to figure out a way to make cuts or raise new revenue to offset that in general.”

Gov. Holcomb has already asked state agencies to curb their budgets by 15 percent, but some big expenses are coming. Watts points out that because of the pandemic, more people will likely be signing up for Medicaid, which will put even more strain on the budget.

The state has gone from a $2-billion surplus to being “in the hole” in a matter of months. That will affect all government programs, including schools, though those schools have been promised their full money for now.

“I think that there will have to be some serious consideration given to new revenue,” said Watts, when asked if raising taxes would be an option.

He said that lawmakers will likely look for a way to raise some revenue without necessarily raising taxes in general.

“For example, the state cigarette tax, for years now there’s this attitude, well let’s wait until we really have to pull that ripcord,” he said. “Well, this is probably that time.”


  1. Governor: People of Indiana, you are hereby “Ordered” to stay home and “non-essential businesses” shall close until further notice……3 months later……Governor: People of Indiana, the State needs money so we are going to raise your taxes. How about we slash the size of Government instead?


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