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[R29] Column: Tax relief and keeping pension promises
Start Date: 3/19/2013Start Time: 12:00 AM
End Date: 3/19/2013End Time: 11:59 PM
Entry Description
Tax relief and keeping pension promises

A lot has been said and written over the last week about taxes - reduce taxes, refund taxes and be cautious with the tax dollars we have collected.  I just thought reviewing where we are and how we got here might be helpful.

In 2011, the General Assembly wanted to keep government spending in check and ensure, once government collections were at a prudent and sustainable level, that the remainder would be returned to taxpayers. This year’s tax filing is the first time this money has been available, providing some tax relief for Hoosiers in the amount of $111 for single filers and $222 for joint filers. As of last week, more than 1.5 million taxpayers had already taken advantage of Indiana’s Automatic Taxpayer Refund (ATR) credit with $171 million being returned.

Indiana closed the 2012 Fiscal Year with more than $2.1 billion in reserves or 15 percent of the state's budget. With a typical taxpayer liability of $850, the refund represents a median tax cut of about 13 percent for the average Hoosier.
 
The state projects that approximately $361 million will be returned to taxpayers this tax season, a nice way to start off the spring season. Another $361 million, funded entirely out of excess reserves above the 10 percent threshold, was allocated to the following state pensions: Judges Pension Fund ($90.2 million); Conservation, Gaming, and Excise Officers' Pension Fund ($14.6 million); Prosecutors' Pension Fund ($17.4 million); State Police Pension Fund ($31.7 million); and Pre-1996 Teachers' Retirement Fund ($206.8 million).
 
Indiana is in a strong position, in comparison to many other states, when it comes to funding its pension obligations because of the fiscal conservatism demonstrated by the General Assembly. While states, like our neighbor to the west – Illinois, struggle to uphold their pension promises to teachers and police officers, they look to rectify the situation by imposing burdensome tax increases. This only grows the size and scope of government, restricts residents’ financial freedom and instills greater economic uncertainty in the marketplace.

The grip that debt has on the states and even the federal government, which was downgraded for the first time in the nation’s history last year, can be paralyzing if a sustainable approach isn't taken. It weighs heavily on a government’s ability to contract low-interest projects, i.e. infrastructure improvements like I-69.
 
Indiana’s General Assembly understands this very basic, but absolutely critical, principle, and I will always work to protect Hoosier taxpayers and their families from encumbering debt.
 
Indiana has a triple-A credit rating from all three major credit rating agencies, the highest rating possible. It’s simple for Hoosiers, an understanding that you pay for what you owe. This is seen in the House’s version of the budget currently being discussed and debated in the General Assembly.
 
As the budget continues to take shape, tax relief will be at the center of the discussion, never losing sight of strategic investments in our state’s future: education, transportation and workforce development. While Illinois faces an overwhelming $96 billion unfunded liability in its five state-employee pension funds, causing their Legislature to consider which tax to increase, we will continue to have discussions about which tax to reduce or eliminate for the long-term betterment of Hoosiers.
 
It is still too early in the process for lines to be drawn in the sand whether actual or self-made. We still have fiscal data to evaluate in mid-April and continuing the dialogue between the governor and leaders in the House and Senate is important.

I'm focused on strengthening Indiana by prioritizing private sector job growth, providing a first class education system and limiting the tax burden facing Hoosiers. It’s a drastically different picture in Indiana. When will states like Illinois or our federal government take notice?

-30-

State Representative Kathy Richardson (R-Noblesville)
Contact Information:
Name: Nicholas Goodwin
Phone: 3172329831
Email: ngoodwin@iga.in.gov
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