Abortion isn't the only complicated issue on the agenda for Hoosier lawmakers during this year's rare special session of the Indiana General Assembly.
Gov. Eric Holcomb's official reason for convening the mid-summer meeting of state lawmakers, to return a portion of Indiana's $6.1 billion in budget reserves to Hoosiers in the form of $225 payments to eligible taxpayers, may end up being just as divisive.
On Monday, state Rep. Sharon Negele, R-Attica, on behalf of the Republican-controlled House, filed House Bill 1001 to implement the Republican governor's tax rebate plan, as well as to increase state spending on programs and services relating to pregnancy and child care.
The proposal, set for review Tuesday by the House Ways and Means Committee, authorizes spending about $1.1 billion in excess state revenue to provide $225 taxpayer rebate payments to some 4.3 million Hoosiers already in the process of receiving $125 checks linked to unanticipated state revenue growth during the 2021 budget year.
If the measure becomes law, up to 800,000 additional Hoosiers who did not file a recent income tax return would become eligible for the $225 rebate, so long as they file a special affidavit with the Indiana Department of Revenue.
The plan also contains a second tax cut long sought by House Democrats — eliminating the 7% state sales tax on child diaper purchases, which the nonpartisan Indiana Legislative Services Agency expects will reduce state revenue by up to $8.3 million a year when fully implemented.
In addition, the legislation increases to $1,600 from $1,500 the per child state income tax exemption, makes the exemption worth $3,200 for a child's first year of life, creates a new $3,000 per year income tax exemption for families with adopted children and sets the maximum state income tax credit for an adopted child at $2,500 per year, up from $1,000.
Backers of the proposal hope it will encourage Hoosier women and families to choose to give birth, or consider adoption, instead of seeking an abortion.
Likewise, the measure appropriates $58.5 million to state agencies and other programs through June 2023 to cover expanded prenatal services, Medicaid birth and delivery costs, child care, contraceptive availability and other anticipated expenses linked to Indiana enacting a near-total abortion ban in Senate Bill 1.
"It's critical Indiana steps up to support struggling families and expectant moms in crisis, and encourages more Hoosiers to consider adoption. Through education, prevention and access to quality care, we can decrease the number of unwanted pregnancies, and create an environment where struggling moms can care for their baby both during and after pregnancy," Negele said.
It's not clear, however, if the Republican-controlled Senate is on board with the tax cuts and spending proposed by the House.
Senate Bill 2, set for review Tuesday by the Senate Appropriations Committee, allocates only $45 million to support various programs focused on maternal and infant health, pregnancy prevention and adoption operated by the Indiana Department of Child Services, Indiana Family and Social Services Administration, Indiana Department of Health and Indiana Department of Homeland Security.
Meanwhile, Senate Bill 3 scuttles the governor's plan for $225 taxpayer rebate checks and instead takes a penny off the state's record-high gasoline tax, suspends the collection of Indiana's 7% sales tax on residential utility bills through the end of the year, sets aside $215 million for future state construction projects and deposits $400 million in Indiana's pension stabilization fund.
"We have had ongoing discussions about what the best way is to provide relief to Hoosiers in this environment of high inflation," said state Sen. Travis Holdman, R-Markle, chairman of the Senate Appropriations Committee.
"By suspending the 7% sales tax on residential utilities, we can provide relief to nearly every Hoosier, with an estimated statewide savings of $260 million. This concept would benefit more people than the proposed taxpayer refund, and all of the savings would go to Indiana households," Holdman said.
The House and Senate currently are planning to end the special legislative session around Aug. 5 and must adjourn, by law, no later than Aug. 14.
Both chambers must approve a tax and spending proposal with identical language prior to those deadlines to send it to the governor to be signed into law or vetoed.
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