Leaders of both Republican factions floated the idea of exploring more tax cuts and education investments on Tuesday during organizing day marking the start of the 2023 legislative session.
The day includes the swearing-in of newly elected lawmakers and the formal voting of leaders in the House and Senate chambers.
GOP Senate President Pro Tem Rodric Bray of Martinsville told reporters Tuesday he “loved the idea of tax cuts” and even held out the prospect of the eventual elimination of income taxes in later sessions.
“We want to find something that makes Indiana attractive to workers across the country (and) could be a part of that,” Bray said. “Rather than making a small incremental change here or there, I would take this proposal very seriously when we get to a point where we can restructure and get rid of this income tax altogether.”
But he said it won’t happen in this session.
Indiana’s individual income tax brought in $8 billion in fiscal 2022. Only nine states have no personal income tax.
Incoming Ways and Means chairman Jeff Thompson, R-Lizton, will look at ways to reduce the property tax burden for Hoosiers and consider whether Indiana could maintain an additional income tax cut on top of what’s already planned. Huston said tax breaks are necessary for Hoosiers because of ongoing inflation concerns and the “skyrocketing size of the federal government.”
“I believe there is an appropriate role for government, but it must be limited. Too often our first reaction to a problem is, “How is the government going to solve this?” That question shouldn’t be our first…it should be our last resort,” Huston said.
The role of government in investments, schools
But when it comes to retirement investment strategies, Huston called for increased state government oversight during his organizing day speech.
Proponents of ESG investing — or environmental, social, and governance investing — argue that they should use their mutual funds to reflect their values. Opponents say results, not dogma, should drive investment strategies.
“We want — particularly within our pension funds — our pension fund managers to focus on return on investment and not on energy and social policies,” Huston said.
He said this could include “a variety of different things,” such as politically motivated decisions to secede from other countries. Indiana severed nearly $150 million in investment ties with Russia after it invaded Ukraine.
Huston didn’t specifically answer how Indiana would avoid the same consequences as Texas, which passed its own anti-ESG investment law in 2021. Researchers estimate Texas companies will pay $303 million to $532 million in additional interest due to slacking bond competition ESG ban.
The Speaker also called again for expanding parental choices and did not rule out the return of an Anti-Critical Race Theory bill passed by the House last year. This bill dictated what teachers could and could not teach in the classroom on various social issues, and at one point developed into an argument that teachers should be “impartial” when discussing Nazism.
However, the bill died in the Senate. After that “robust conversation,” Bray said the issue was best left to local schools.
“I think that was a pretty big argument in school board elections across the state of Indiana,” Bray said. “This is a great way for Hoosiers to engage with this issue and make decisions more locally than we can here in the General Assembly.”
Continued attention to divisive, social issues
House Minority Leader Phil GiaQuinta, D-Fort Wayne, reiterated his appeal to Huston and the rest of the Republican faction not to let divisive social issues distract them from what he says Hoosiers really values: things like funding the public education and securing good-paying jobs and reducing healthcare costs.
“In the last few sessions we’ve seen more of what I would call divisive social issues. In my opinion, it diverts our attention from the things that Hoosiers really care about,” GiaQuinta said on the organizing day. “The issues that we’ve seen, particularly over the past year, have made all sorts of headlines for the state of Indiana and aren’t presented in a very good light.”
Huston pressed no other social issues, telling reporters Monday his caucus would “stick” on the abortion and remained committed to passing a balanced budget.
“There’s going to be a whole body of bills that will come out and I’m sure both sides want to weigh social issues,” Huston said. “But this is a budget session and that’s where I think the vast majority of the focus will be.”
On the other side of the Statehouse, Bray assured reporters that the Senate would not address these divisive social issues.
“You won’t see those on our priority list,” Bray said.
This story by Whitney Downard and Casey Smith was republished by The Indiana Capital Chronicle, an independent, nonprofit news organization covering state government, politics and elections.