Q&A

Q&A: Indiana House Ways and Means chair talks property taxes, state budget and health care costs

Indiana state Rep. Jeff Thompson sits at his desk on May 29, 2024. (Credit: Rory Appleton)

Key Points
  • Lawmakers consider “guardrails” around growing property taxes
  • Leaders also look at income taxes, health care costs

Two regular expenses many Hoosiers absorb — property and income taxes — will be among the Indiana General Assembly’s top discussion topics when interim committees meet this summer ahead of the 2025 legislative session. 

The Legislature is also preparing to set Indiana’s spending priorities with a new state budget. 

State Rep. Jeff Thompson will have input on all of these matters as chairman of the Indiana House of Representatives’ Ways and Means Committee. He sat down with State Affairs for a conversation on taxes, state spending and beyond. 

This conversation has been edited for clarity, brevity and length.

Q. Property taxes are top-of-mind for a lot of people. What’s being discussed?

A. Well, first of all, property taxes are 100% collected at the local level. And with some exceptions, [the localities] can control pretty much what they levy now. There are some things on debt. They’ve got to pay debt. But beyond that, it’s really a local issue. 

Yes, we’re talking about some reforms and what things we can do to put guardrails [around property taxes]. But the ultimate responsibility lies with local government.

Q. How about property taxes as they pertain to seniors?

A. Well, we right now have some senior deductions for certain income levels. And it gets in the weeds real quick, but the reality is some seniors, if the locals raise the rate too high, get a deduction. But sometimes it doesn’t actually apply, and so some [seniors] get it and some don’t. 

And so how do we make that uniform? There’s a lot to discuss in the next six, seven months. Nothing is concrete. I had meetings yesterday, and I’m going to have some later today to talk about some things we can do in that regard — to be sure that all seniors, at least at the appropriate level, end up with some type of relief. 

Where that should be at what thresholds and so forth — we’ll be discussing that.

Q. How about income tax? Some, like Lt. Gov. Suzanne Crouch, have floated the idea of getting rid of it.

A. Well, we’re having some long-term discussions on what we do with state income tax. 

I think that property taxes are probably a larger issue for most people. Indiana has one of the lowest — if not the lowest — income tax rates in the nation for those that have an income tax. 

[Income tax] is about 35% to 38% of the state revenue. And when you know that public education, Medicaid and higher education tie up 75% — to eliminate it just, boom, you’d have to have another source. 

Now, you can talk about a slow, gradual decrease. That’s a different discussion. And we’ll have those discussions, but I think probably for a lot of people the property taxes will be the larger issue.

Q. We’re heading into a budget year as well. What are some of the priorities you have for the budget?

A. A balanced budget. Don’t spend more than what you take in. It has to be structurally balanced. 

The Medicaid situation obviously is going to impact how that all shakes out. We’ll determine how many, if any, additional dollars we have and see what the revenue forecast looks like. And then, come December, that will kind of drive it.

If we have some additional dollars, we’ll have more to spend on things like K-12 [education]. But it could be a situation where we don’t have a lot of dollars. So, we just have to budget accordingly.

Q. Is there anything that can be done legislatively about the growing Medicaid costs?

A. Yes. But those aren’t easy decisions. There are some things you could do, but do people want to do those? It will be difficult to do. I won’t say that we wouldn’t talk about those, but there will be some pushback.

Q. What’s an example of that pushback?

A. Well, we have different programs in Medicaid that aren’t required to be a part of the program. And off the top of my head I can’t think of any, but those that are optional — the state could say we’re not going to do them. But I can assure you there would be some pushback if we did eliminate some programs.

Q. Talking about the budget, have you or anyone else had conversations with Sen. Mike Braun about any priorities he might have if elected governor?

A. We haven’t yet, but we will.

Q. One area the Legislative Council talked about addressing was health care costs. Do you foresee any talks on that?

A. That discussion is going on right now. I’m sure that [physician and state Rep. Brad] Barrett will be involved in those discussions in the next six or seven months. What can we do to help Hoosiers keep those costs near at least the national average? We’re above that.

Q. Are there any other non-budget or non-tax-related issues you see coming up in the next legislative session?

A. Nothing jumps to mind. 

My focus now is kind of all tied to the dollars. That’s what happens in this office. But I’m sure there will be things that come up. There are always the surprise issues that come up. And some of these may precipitate other ideas that are related, but I guess we’ll see that in the coming months.

About Thompson
  • Title: Indiana state representative, chair House Ways and Means Committee
  • Age: 68
  • Hometown: Lizton
  • Education: Bachelor of Science in Physics from Purdue University
  • Career: Retired teacher at Danville Community High School, North Salem State Bank board member
  • Family: Thompson and his wife, Michelle, have six children and two grandchildren
  • Hobbies: Gardening

Contact Rory Appleton on X at @roryehappleton or email him at [email protected].