After Eli Lilly CEO David Ricks’ gloomy view of Indiana’s appeal to businesses and workers, it’s clear that the GOP tactic of cutting taxes and offering tax credits to business without bold investments in education, quality of life or public health has set us on a course for ruin if we do little to correct it. On the contrary, Republican politics has actively undermined smart ideas for solving problems through the free market.
Indiana college graduates who have student loan debt owes $30,000 on average. This significant burden effectively prevents millennials and now Gen Z from becoming homeowners, starting families, and pumping money back into their local economies. The federal government has thankfully helped those with student loans by suspending student loan payments during the COVID-19 pandemic.
Failure to act on this emerging crisis is wrong. But actively undermining companies’ efforts to offer relief to employees is even worse – and an action the General Assembly took during the last legislative session in the form of a seemingly “unnoticed” provision in Act of registration in the Senate 382.
Suppose you have just been hired by an employer who offers to pay off the principal of your student loans as one of their benefits. Well, under the provisions of SEA 382, this employer contribution is now considered income and therefore taxable in Indiana, even though the federal government does not tax such contributions. Many other states also do not mandate this employer-supported relief, which means Indiana once again stands out for its state-enforced insensitivity.
As a tax-compliant state, Indiana adopts all aspects of the federal tax code for our state taxes, unless lawmakers write legislation to remove or modify portions of the income tax code. of the state of Indiana. This is one of those provisions, which means Republican lawmakers have been actively pushing hard to prohibit student loan debt relief.
What about this slap in the face to those with student debt? Like clockwork, every few months we’re hit with comments from community leaders like Ricks or a new study showing that other states are outperforming Indiana on economic development or simple quality of life outcomes. . We are at a crossroads to determine the future success of our state: either we continue to do business as usual, or we decide to invest in the education, economic well-being and health of our residents. .
One of those avenues is to fix this provision in the next session and allow this employer incentive to be what it is: an employment benefit that should be used entirely to pay down debt. of an employee.
Another solution is inspired by the philosophy of the MakeMyMove program. The MakeMyMove Incentive Program offers incentives such as cash allowances, moving assistance, free park passes, vouchers for discounted meals, etc., to a few people (usually no more than ‘a dozen). As a result, recipients of this program are relocating to rural areas and a few small urban areas to help “jumpstart” the economy, increase the tax base, and infuse talent into those locations for people who can now work remotely. Even this initiative — which, with the current composition of the General Assembly, will certainly benefit GOP lawmakers’ districts more than Democrats — was not funded by the Republican supermajority in the 2021 legislative session. of this, local governments have led the lone charge for funding this program.
It is true that we must encourage young people to live in all parts of our state. But we also want young people to stay in our state, period. Indiana is to launch a “HelpMeStay” program providing relief and programmatic support to recent graduates so they are incentivized to put down permanent roots here. A first step in that direction would be the repeal of Indiana’s tax on student loan debt found in SEA 382. So let’s do just that – let’s help our young people stay here.
Gregory Taylor, D-Indianapolis, is an Indiana State Representative.