(INDIANAPOLIS) — For the third time in six years, the Senate will consider whether to raise
Indiana’s cigarette tax.
Two previous tax hikes passed by the House have been dead on arrival in the Senate. But
President Pro Tem Rod Bray (R-Martinsville) says the 50-cents-a-pack increase in the House
version of the budget may be too low. House Ways and Means Chairman Tim Brown (R-
Crawfordsville) sought to split the difference between supporters of a dollar-a-pack increase and
opponents of raising it at all. Bray says the point of raising the tax is to push the price high
enough to discourage people from smoking, and notes health advocates argue an extra 50 cents isn’t enough to accomplish that.
A 50-cent increase would move Indiana from the 11th-lowest tax in the nation to 19th-lowest. A
dollar increase would put Indiana a half-cent behind Michigan and make it 24th-highest.
Bray says he doesn’t know if the tax will move forward, but says if it does, it should be tied to
specific health initiatives. The House bill puts the money toward Medicaid. It also would tax e-
cigarettes for the first time.
The cigarette and vape taxes are included in House Republicans’ version of a new state budget.
Bray expects to keep two new grant programs proposed by the House: one for local health
initiatives, and another for summer school for students who fell behind during the pandemic.
Bray says the House and Senate will begin negotiations on a final budget even before the Senate
introduces and passes its version of the bill, in hopes of reaching a final agreement quickly after
analysts update their economic forecast in April. He notes some items can’t be finalized until that
forecast pins down the amount of money legislators have to work with.