Growth in corporate tax collections – the third largest source of state revenue – is expected to stall in the second year of Indiana’s next budget.
It’s partly why lawmakers face a tight budget - and some say ongoing tax cuts are to blame.
In the next state budget’s second year, corporate income tax growth is projected to be just 0.3 percent, an expected increase of just $2 million.
Sen. Karen Tallian (D-Portage) says that’s what happens when the corporate tax rate has been cut for the last seven years and will continue to see cuts for the next three.
“If we stop them now, we’ll put on about $70 million just in this biennium,” Tallian says.
But House Republican budget architect Rep. Tim Brown (R-Crawfordsville) says his concern is about Indiana’s business climate.
“We want to have a tax environment where business wants to flourish and wants to spend their money and research and technology,” Brown says.
The 2019 budget-writing session begins Jan. 3.