By TOM DAVIES
Associated Press
INDIANAPOLIS (AP) — Indiana’s new state budget will expand eligibility for its private school voucher program to higher earners and speed up planned income tax rate cuts under a deal announced Wednesday by Republican legislative leaders.
Senate Republicans initially resisted both House-backed moves. But they were included in the budget agreement after an updated tax revenue report released last week showed the state is projected to collect about $1.5 billion, or 2.5% more than previously expected, through July 2025.
The budget deal will speed up individual income tax rate cuts that the Legislature approved a year ago. Under the new plan, the tax rate would decline in small steps from the current 3.15% to 3.05% next year. It would reach 2.9% in 2027 — two years earlier than currently scheduled.
Republicans said the accelerated rate reductions will cut the taxes owed by Indiana residents by about $360 million over the next two years.
The deal, however, does not include any steps toward stemming the double-digit percentage increases in property tax bills that many homeowners are seeing across the state this year because higher sales prices have pushed up property value assessments. Republican House Speaker Todd Huston said he expected legislators would approve some actions to address those increases but acknowledged those wouldn’t reduce property tax payments owed this year to local governments and school districts.