National Taxpayers Union: Indiana Lawmakers Working on Last Minute Budget, Taxpayers Expected to Take a Beating

3/14/2002

From: Jerry Terry or Pete Sepp, 703-683-5700 both of the National Taxpayers Union

ALEXANDRIA, Va., March 14 -- With the deadline to complete their work just hours away, Indiana Legislators have made little progress on the budget and a major tax overhaul bill, yet it already looks like taxpayers will be the big losers, according to research by the 335,000-member National Taxpayers Union (NTU). The group has more than 8,000 Indiana members.

"It is outrageous that Indiana's Legislators and Governor are even considering a tax increase," said NTU President John Berthoud. "Over the last decade a booming economy has provided massive tax revenues for Indiana that far outpaced inflation. Now that the economy has slowed down, Indiana's elected officials don't want to give up their free-spending habit, so they are looking to already-overburdened taxpayers for more money. Instead, they should be looking at tax cuts to boost the economy and create more jobs."

Recently NTU studied and critiqued the O'Bannon/Kernan budget and tax reform proposals. Among other things, NTU found that:

-- After adjusting for inflation, in FY2001-02 Indiana spent $3.1 billion, or about 32 percent, more than it did just a decade earlier;

-- Over the last ten years, this amounts to an extra $12.6 billion taken from Indiana's taxpayers to expand the size of government over its 1991 level; and

-- According to the Small Business Administration, 13,515 new businesses started in Indiana in 1999. That same year, 16,797 businesses failed in Indiana, a situation that could be exacerbated by tax increases.

The Indiana Legislature is scheduled to adjourn on March 14, 2002. However, since little progress has been made on agreeing to a tax reform bill the Legislature is considering a special session, a move that could cost taxpayers as much as $20,000 per day.

"The possibility of spending extra tax dollars for a special session because the Legislature didn't get their work completed in a timely manner is a slap in the face to every Indiana citizen," noted Berthoud. "Indiana's General Assembly has been in session for well over two months, and its members were aware of this problem long before that."

"If Indiana's elected officials really want what is best for their constituents they will reduce unnecessary spending and enact meaningful tax cuts," Berthoud concluded. "That may not be the easiest solution for politicians, but it is the best solution for Indiana's taxpayers."

NTU was founded in 1969 to work for lower taxes, the elimination of wasteful government spending, and increased accountability from elected officials. More information, as well as NTU Issue Brief, 133, The Better Solution to Indiana's Budget Troubles: Put Government on a Diet, is available online at www.ntu.org, or by calling 703-683-5700.