Leaders of both Republican caucuses floated the idea of exploring continued tax cuts and education investments Tuesday during Organization Day, which marks the beginning of the 2023 legislative session.
The day includes swearing in newly elected legislators and formalizes the votes for leaders in the House and Senate chambers.
GOP Senate President Pro Tem Rodric Bray, of Martinsville, said he “loved the idea of tax cuts” to reporters Tuesday, even floating the eventual elimination of income taxes in later sessions.
“We want to find something that makes Indiana appealing to workforce(s) across the country (and) that might be a piece of it,” Bray said. “Rather than do a small incremental change here or there, if we can get to a point where we can restructure and get rid of that income tax altogether, I would take that proposal very seriously.”
But he said it won’t happen this session.
Indiana’s individual income tax brought in $8 billion in Fiscal Year 2022. Only nine states don’t have a personal income tax.
Incoming Ways and Means Chair Rep. Jeff Thompson, R-Lizton, will be exploring ways to reduce the property tax burden on Hoosiers and explore whether Indiana could sustain an additional income tax cut on top of the one already scheduled. Huston said tax relief was necessary for Hoosiers due to ongoing inflation concerns and the “ballooning size of the federal government.”
“I believe there’s an appropriate role for government but it must be limited. Too often, our first response to a problem is to ask, ‘How’s government going to fix this?’ That question shouldn’t be our first… it should be our last resort,” Huston said.
Government’s role in investing, schools
But in terms of pension investment strategies, Huston called for expanding the state government oversight during his Organization Day speech.
Advocates for ESG investing – or environmental-, social- and governance-focused investing – argue that they should use their investment funds in a way that reflects their values. Opponents say that results, not dogma, should drive investment strategies.
“We want – particularly within our pension funds – our pension fund managers be focused on return on investment and not on energy and social policies,” Huston said.
He said that could include “a variety of different things” such as politically motivated decisions to divest from other countries. Indiana cut off investment ties with Russia, nearly $150 million, after it invaded Ukraine.
Huston didn’t specifically answer how Indiana would avoid the same consequence as Texas, which passed its own anti-ESG investment law in 2021. Researchers estimate that Texan entities will pay an additional $303-532 million in interest due to decreased bond competition following the ESG prohibition.
The speaker also again called for the expansion of parental choice and didn’t rule out the return of an anti-Critical Race Theory bill that passed out of the House last year. That bill dictated what teachers could and couldn’t teach in the classroom on various social issues, at one point devolving into an argument that teachers should be “impartial” when discussing Nazism.
The bill died in the Senate, however. Following that “robust conversation,” Bray said that topic was best left to local schools.
“I think that was debated pretty vigorously in the school board elections across the state of Indiana,” Bray said. “That’s a great avenue for Hoosiers to take a look at that issue and make decisions more locally than we can here in the General Assembly.”
Continued attention on divisive, social issues
House Minority Leader Phil GiaQuinta, D-Fort Wayne, repeated his appeal to Huston, and the rest of the Republican caucus, to not let divisive social issues distract from what he said Hoosiers truly value: things like funding public education, securing good-paying jobs and reducing health care costs.
“The last couple of sessions, we’ve seen more of these – what I would call – divisive social issues. In my opinion, I think it turns our attention away from the things that are really important to Hoosiers,” GiaQuinta said on Organization Day. “The issues that we’ve seen, particularly in the last year, made all kinds of headlines for the state of Indiana and not in a very good light.”
Huston didn’t press any other social issues, telling reporters Monday that his caucus would “stand pat” on abortion” and remained committed to passing a balanced budget.
“There’ll be a whole collection of bills that will be filed and I’m sure both sides will want to weigh in on social issues,” Huston said. “But this is a budget session and that’s where I think the vast majority of the focus is going to be.”
Across the statehouse, Bray assured reporters that the Senate wouldn’t be taking on those divisive social issues.
“You won’t see those on our priority list,” Bray said.
This story by Whitney Downard and Casey Smith is republished from The Indiana Capital Chronicle, an independent, not-for-profit news organization that covers state government, policy and elections.