Indiana Budget Bill Amended with Broad Tax Increases and Spending Reductions

Republicans and Democrats held news conferences to discuss the final version of the Indiana budget bill, which includes significant changes in response to an anticipated revenue gap of $2.4 billion.

Senate President Pro Tem Rodric Bray noted that lawmakers have been working to make cuts across the board for about 10 days.

Key highlights of the changes announced by Republicans include:

"The doubling of the Indiana tax for cigarettes and other tobacco products. All the extra money raised will go to Medicaid, which is fast-growing in the state budget." — Senate President Pro Tem Rodric Bray

This change will increase the tax on a pack of cigarettes and other tobacco products from about 99.5 cents to $2, raising $4 million for cigarettes and $25 million per year for other tobacco products.

Taxes will also rise 2% on some other products, with details to come.

K-12 funding will grow by 2% each of the next two fiscal years, with additional money added in the second fiscal year to cover a program allowing vouchers for school choice.

Higher education will see a 5% cut, while local governments will receive an increase of 1.6% in the first year and 5.1% in the second year.