$2 cigarette tax added into state budget

INDIANAPOLIS - Tobacco products are set to be more heavily taxed in Indiana as lawmakers scramble to reel in a projected $2.4 billion shortfall in the state's budget.




With state spending set to exceed incoming revenue by billions of dollars, Republican lawmakers have reconsidered a solution previously pushed by Democrats: a long-overdue increase to Indiana's cigarette tax.




On Wednesday, Governor Mike Braun and several Republican legislative leaders introduced the finalized version of the state's 2025 budget. The budget included the first tax hike on cigarettes in nearly 20 years.




Hoosier smokers can expect to pay $2 per pack in taxes on cigarettes. This is roughly double the current rate. All tobacco products will see an increased tax in Indiana, not just cigarettes. Users of vapes, e-cigarettes and chewing tobacco won't be spared from shelling out roughly double the rate in taxes.




Republican leaders previously shied away from the Democrats' suggestion of increasing tobacco taxes in Indiana but came back to the table after staring down a $2.4 billion shortfall.




"Along with the revenue comes a pretty good public policy that is going to help persuade people either to not start smoking or stop smoking at the same time," said State Sen. Rodric Bray, (R) Senate President Pro Tem. "So I think everybody expects that number to decrease over time, but that's because we'll have fewer smokers."




But the estimated $400 million in revenue from the tobacco tax increase is only a start to bridging the $2.4 billion gap.




The finalized budget includes a bevvy of cuts, with government offices and agencies being forced to tighten their belts. The Indiana Economic Development Corporation was one of the departments singled out by Braun and company for heavy cuts.




Republican leaders said the finalized budget cuts capital by one percent, cuts general government spending by one percent and cuts higher education by one percent.




"When times get a little tough, it's when the best and the leanest are prepared to take more market share," said State Rep. Todd Huston, (R) House Speaker. "For us, market share is population and economic growth. Between SB1 and this budget, that's what we'll continue to lean into."




But not everything is facing the chopping block. Republican leaders said the Department of Child Services, Family & Social Services Administration, and the Indiana Department of Correction will be fully funded.




As for education funding, $954 dollars are allocated to education. However, $93 million of that sum will go towards expanding school choice vouchers to make them universal.




The Republican leaders also said the massive shortfall will not change their plans to decrease the individual income tax rate.




While the budget must be finalized by April 29, Republican lawmakers hope to push through the finalized budget Thursday night. While many Indiana Democrats were happy with the inclusion of the cigarette tax, some expressed apprehension about throwing support behind this latest budget iteration.




"The most troublesome part is only giving $40 million to local public health initiatives, even though we're going to 'Make Indiana Healthy Again," said State Rep. Gregory W. Porter (D-Indianapolis).





via: https://fox59.com/indiana-news/2-cigarette-tax-added-into-state-budget/