IN Focus: Indiana officials discuss tax credit, ILEARN results

IN Focus: Indiana Politics

INDIANAPOLIS – With the announcement of a refundable income tax credit for all Hoosier taxpayers due to a spike in state revenue, Democrats and Republicans disagree on who gets the credit: the Biden administration or Indiana Republicans at the state level.

Both sides agree that Indiana’s economy has seen significant growth over the past year.

“We kept seeing record revenue coming in – whether it’s sales tax, income tax, corporate tax,” Indiana Auditor Tera Klutz told us in an interview after the announcement.

Those gains helped the state earn nearly $4 billion in reserves over the past year, Klutz said. As required by state law, about $1.1 billion of that money will be divided between a retirement fund for teachers and an income tax credit for Hoosiers.

“When you’re stimulating the economy, people are either going to save that money or they’re going to spend it,” Klutz said. “We anticipate a lot of people spending. We also think a lot of our employers are hiring employees and they’re increasing their wages, so we’re getting more income tax.”

The state will figure out how much the refund will be worth per taxpayer based on how many Hoosiers file taxes this year, according to state officials.

The last time this refund was given out – in 2013 – each taxpayer earned a $111 credit.

“We have great policies in place that encourage pro-growth businesses, and for that reason our businesses have flourished,” said State Rep. Bob Behning (R-Indianapolis).

Officials on both sides of the aisle are excited about the news but differ on who deserves the credit.

“Democrats delivered on the American Rescue Plan,” said Drew Anderson, communications director for the Indiana Democratic Party. “And it’s because of the Rescue Plan is that Indiana has been able to stay in such strong financial position.”

Meanwhile, state lawmakers are not ruling out the possibility of lowering taxes next session.

“We want to always make sure we’re being fiscally responsible and keeping the taxpayer in mind,” House Speaker Todd Huston said during a phone interview Friday.

We also asked Speaker Huston for his reaction to this year’s ILEARN results, which revealed only 28 percent of students who took the standardized test passed both the English and math portions.

“It was clearly disappointing and through no fault of the student or the parents or the educators,” Huston said. “Obviously it was extraordinarily unique and challenging the last 16 months. But it just means we need to be laser-focused on how we help kids get caught up.”

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