INDIANAPOLIS (WANE) – “I love being in a position where we’re continuing to talk about responsible tax cuts.”
That’s Indiana Governor Eric Holcomb (R) during a one-on-one interview with WANE 15 earlier this week at the Statehouse. With robust revenue being collected by the state, many Republican legislators in the supermajority have discussed an overhaul to the state’s tax code during the 2022 session.
Holcomb seemed enthused but cautious.
He credited this year’s Indiana corporate income tax cut for speeding the state’s pandemic recovery. “Obviously, we are overperforming. Our state is growing by every economic measure: GDP, housing, single family home building permits, revenue reserves.”
Indiana coffers overflowed enough to trigger an automatic payback to Indiana taxpayers. “So that’s, in effect, a tax cut as well.”
The state’s December revenue forecast might hold the key. Holcomb said the state needs to sort through actual economic growth and the money being pumped in by the federal government. “Whether you agree with it or not, they pumped a lot of dollars into states that had a positive effect on our bottom line. But you wonder: when does this settle back down? So you don’t want to prematurely cut but you also don’t want to take in more than you need.”
Indiana on the wrong economic path?
Holcomb also reacted to recent statements, including one from inside his own administration, that suggest the state’s strategy of low business taxes is not attracting high-paying jobs.
David Rosenberg, executive vice president of the Indiana Economic Development Corp. (IEDC), told the Fort Wayne Journal Gazette that the agency was using “new vision” as “Indiana (gross domestic product) has underperformed the U.S. GDP 50% of the time over the last five decades.”
“Indiana is a much different state than we were 50 years ago,” said Holcomb in defense. He said former Governor Mitch Daniels “turned the aircraft carrier around” in 2005. Holcomb was part of that team.
“We were drifting and drowning in debt. We were delaying payments to local schools and local governments. We flipped that script. In fact, you get a much different picture on our GDP growth over the last five years with every state that we touch and the national average. They are two different scenarios.”
Holcomb’s office sent data from the federal government to support the claim.
The governor also pushed back against analysis by Ball State economist Michael Hicks that says our “Mississippi strategy” of “low taxes, declining educational attainment and huge tax incentives to businesses” has lead to declining relative wages and declining productivity.
“I’d love to have coffee with with Mr. Hicks and talk about our wages,” Holcomb responded before emphatically listing off statistics to show otherwise.
“Right now through the IEDC, we are at $27.88 per job on average. On average! We have 155,000 open jobs. Right now. We have 110,000 unemployed Hoosiers. We have more jobs available (than workers) and we’re adding about 30,000 new jobs every year through just the IEDC, not what’s happening in the private sector that we had nothing to do with.
“The opportunity is there. Our challenge and our goal is to get those Hoosiers who are not just unemployed, but underemployed, the skill sets that they need to fill those jobs right now and we’ll grow even more than that the record pace we’re growing right now.”