6/24 Torchbearer Weekly Policy Update
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- State Revenues Beat Estimates in May
- Democrat Jennifer McCormick Taps Former Indiana Rep. Terry Goodin for Lieutenant Governor
- Farmers ask For Property Tax ‘Intervention’ as Communities, Schools Talk Challenges
- Biden to Waive Penalties for Undocumented Spouses of U.S. Citizens
- Closing Asset Loophole Could Add Billions to Tax Collections, IRS Says
- North-Central Water Withdrawals in Decline, Indiana Finance Authority Reports
- Share the Torchbearer Newsletter with Your Network!
- Important Dates
Let’s dive in.
State Revenues Beat Estimates in May
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Indiana's revenue collections for May exceeded projections, reaching almost $1.6 billion. Higher-than-expected individual and corporate income taxes compensated for lower sales tax collections. Notably, collections from individual income tax, corporate income tax, riverboat wagering, and racino wagering all surpassed expectations last month. However, sales tax collections fell slightly below projections, totaling $850 million.
Why it matters: These revenue collections are crucial for Indiana's budget planning. It signifies the state's strong economic performance and implies the potential for increased government spending.
Go deeper: You can connect to the full May 2024 revenue report by clicking here. (Inside Indiana Business)
Democrat Jennifer McCormick Taps Former Indiana Rep. Terry Goodin for Lieutenant Governor
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Democratic gubernatorial nominee Jennifer McCormick has chosen former Indiana lawmaker and social conservative Terry Goodin as her running mate. McCormick emphasized that Goodin's selection aligns with their commitment to restoring reproductive rights and freedoms, prioritizing education, and ensuring good paying jobs. She also highlighted their dedication to bringing back common sense civility and bipartisanship, focusing on issues that impact people's daily lives.
Yes, but: The announcement has generated mixed reactions on social media, with some Democrats wishing for a more progressive candidate. Goodin's record on women's reproductive rights and LGBTQ+ issues has been a point of contention, but he expressed remorse for past votes and affirmed his commitment to personal freedoms and individual rights.
The bottom line: Goodin must still be approved as the official lieutenant governor candidate by Democratic convention delegates in July. Two Hoosiers — Bob Kern and Clif Marsiglio — have also filed to run for Indiana lieutenant governor at the upcoming state convention, and shortly after McCormick’s announcement, Sen. J.D. Ford, D-Indianapolis, added intrigue to the situation by telling Importantville’s Adam Wren that he is also considering a convention run. (Indiana Capital Chronicle)
Farmers ask For Property Tax ‘Intervention’ as Communities, Schools Talk Challenges
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Property taxes again took center stage during tax reform discussions Tuesday — with farmers asking for a reprieve and local units of government seeking to head off significant cuts in revenue.
What they’re saying: “That’s it: how do you make (the system) simple, yet take care of those folks that have different needs? … It’s complex to fix it.” Rep. Jeff Thompson, who chairs the State and Local Tax Review Task Force, told the Capital Chronicle upon adjournment.
The backstory: Thompson in April warned of impending jumps in agricultural land property taxes. And on Tuesday the Indiana Farm Bureau said its members “need an intervention.” Indiana uses recent sales to assess most property types, but farmland is different.
The Department of Local Government Finance (DLGF) instead determines a “base rate,” a rolling average with six years of capitalized net cash rent and net operating income. DLGF drops the highest value of the six and averages the remaining five years.
But Indiana Farm Bureau’s advocacy lead, Katrina Hall, said the years-long delay in the formula data means farm income per acre is dropping even as the base rate grows. “It’s kind of a fiscal cliff,” she said. That delay will keep hitting farmers.
While the formula does help farmers, Hall continued, it’s still volatile because the net operating income calculation relies heavily on corn and soybean prices. “We have homeowners and other folks whose bills go up a few hundred dollars, and that is real burden to them. But for farmers, it’s several thousand at a time,” she said.
Yes, but: Groups representing Hoosier municipalities and counties, meanwhile, acknowledged rising tax bills but detailed their members’ challenges. The Association of Indiana Counties’ Ryan Hoff expressed dissatisfaction with limits on how much money local units of government can raise in property taxes.
Indiana caps that amount — the maximum levy — and dictates how much that cap can rise each year via the maximum levy growth quotient. The quotient uses the statewide rate of average, non-farm personal income growth over the last six years.
Campbell Ricci of Accelerate Indiana Municipalities said local income tax is controlled at the county level, so interested cities and towns can’t make changes unilaterally. He pushed to give individual municipalities that power.
On the other hand: Organizations representing school boards, business officials and superintendents — alongside small and rural schools — said the state’s current property tax system has some struggles. (Indiana Capital Chronicle)
Biden to Waive Penalties for Undocumented Spouses of U.S. Citizens
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President Biden will clear the way on Tuesday for hundreds of thousands of undocumented immigrants married to U.S. citizens to apply for legal residency in one of the most expansive immigration programs of his presidency.
Why it matters: The policy is a bold move before the November elections and a rebuke to congressional Republicans who have ignored calls to expand border security and create a path to citizenship. This affects immigrant families, providing relief and preventing separation.
The bottom line: This announcement builds on the Obama administration's executive action in 2012 that allowed undocumented immigrants who arrived in the U.S. as children to apply for work permits. It showcases Biden's commitment to immigration reform. (Washington Post)
Closing Asset Loophole Could Add Billions to Tax Collections, IRS Says
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The Biden administration plans to stop businesses and wealthy individuals from manipulating the value of assets in arcane ways such as using the same assets over and over to lower their taxes.
Why it matters: These transactions reduce tax bills, costing the government billions. The new rules aim to increase tax collections by $5 billion per year over the next decade.
The big picture: Partnerships have been using complex structures to avoid taxes by shifting assets. The IRS considers most of these transactions illegal due to their lack of economic substance.
The bottom line: The IRS will crack down on basis shifting, audits will increase, and new regulations will be proposed to require more transparency from large partnerships. (Washington Post)
North-Central Water Withdrawals in Decline, Indiana Finance Authority Reports
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Water withdrawals in the state's north-central region have dropped over the last two decades, according to a report by the Indiana Finance Authority (IFA).
Why it matters: It highlights the decreasing water demand in the region and the shift in industrial water usage.
The big picture: The IFA took control of an Indiana Economic Development Corp. water study connected to the development of an industrial park. The study analyzes the water demand and supply in the 15-county upper Wabash River watershed.
The bottom line: Water withdrawals have been declining since 2006, and the industrial sector now consumes the majority of the total water. The report emphasizes the need for sustainable water management and highlights the changes in water usage patterns over the years.(Inside Indiana Business)
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Important Dates:
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- State Board of Education - Monday, July 17 at 9am