Indiana Assets & Opportunity Network Sees Two Long-Awaited Victories at the State Legislature This Year
INDIANAPOLIS, IN –
The Indiana Assets & Opportunity Network (A&O Network) is pleased to announce two key policy victories for low and moderate income families following the conclusion of the 2023 session of the Indiana General Assembly. A&O Network members worked closely with Indiana legislators throughout the session to achieve these victories, including the recoupling of the state Earned Income Tax Credit with the federal credit and a graduation requirement for financial education for all Hoosier high schoolers.
Earned Income Tax Credit Reform
The Earned Income Tax Credit (EITC) is a resource for low and moderate income Hoosiers that encourages work by providing a wage subsidy in the form of a tax credit. Most states, including Indiana, have their own version of an EITC and they calculate it as a percentage of the federal credit. Under current law, Indiana’s state EITC is 10% of the federal credit as calculated before 2009 meaning the state credit is decoupled from the federal credit. The decoupled state EITC has several repercussions including a marriage penalty where a couple currently receives larger individual credits if they are not married than the single credit they receive as a married couple and the barring of foster parents being able to claim foster children on their taxes unless they spent the entire year with them.
During the 2023 legislative session, the Indiana Assets & Opportunity Network advocated for EITC reform in the form of an increased state percentage of the federal credit and recoupling of the state credit back to the federal credit. House Bill 1290 would have achieved the Network’s broader EITC goals, but officially died on April 18th due to it not obtaining a 3rd reading in the Senate after passing unanimously in the House. Ultimately, the recoupling of the EITC with the federal credit was included in the state budget bill in the final few days of session, providing additional relief to married couples, foster parents, parents of three or more children, and families with income disparities.
Representative Chuck Goodrich (District 29), the author of House Bill 1290, said “This tax credit can be a boost for low-income, working families around the state and play a vital role in our fight to end generational poverty. I'm thankful this language was included in the budget to provide additional relief to more Hoosiers, especially our married couples, larger households with three or more children and foster parents.”
Andy Nielsen, Senior Policy Analyst at the Indiana Community Action Poverty Institute and Co-Chair of the A&O Network acknowledged the victory as well as the work yet to be done: “The EITC is a critical resource for Hoosiers to reach financial stability. The change made in the state budget is an important step toward creating a fairer tax code, and will provide millions of dollars to hardworking individuals and families. We appreciate the Indiana General Assembly’s efforts on this issue and look forward to working in the future to expand the tax credit even further.”
Financial Education Graduation Requirement
At the start of the 2023 legislative session a number of bills appeared on the scene with a clear agenda: boost financial literacy in K-12 education. Indiana Code 20-30-5-19 does require that personal financial responsibility be taught sometime between 6th and 12th grade, but in no particular manner. “What members of the Assets & Opportunity Network have been saying for years is that current law simply isn’t sufficient, and that a standalone financial literacy course would be a huge investment in both Hoosier children and the Indiana economy,” says Hale Crumley, Coalition Coordinator for Prosperity Indiana, Co-Chair of the A&O Network.
One bill, Senate Bill 35, authored by Senator Mike Gaskill (District 25) emerged from the pack and made it to the finish line by passing both the House and Senate on the same day, April 24. It now awaits the signature of Governor Eric Holcomb. The legislation will require that all Hoosiers take a standalone financial literacy course in order to graduate high school, with the bill taking effect in time to apply to current 7th grade students. These students will be able to earn credit for their studies of money management, debt management, savings, tax returns, credit scores, simple contracts, and more.
Representative Joanna King (District 49) House Sponsor of Senate Bill 35, celebrates this victory with the A&O Network: “This is good not just for this generation but for the state of Indiana as a whole. We become a bright shining light in our nation that says we take responsibility for our finances, and we then have opportunities because of it. So yeah, it’s a win. It’s a huge win for all of us.”
Representative Dave Hall (District 62), who introduced Senate Bill 35’s companion legislation in the House and helped to shape the final product, reiterated his confidence in this legislation’s necessity: “To ensure students’ long-term financial well-being, it’s crucial that we provide them with a comprehensive understanding of money management. Equipping them with this knowledge is essential in preparing them for life beyond high school.”
Phil Schuman, Executive Director of Financial Wellness & Education at Indiana University Bloomington and A&O Network Steering Committee member also applauds the passage of Senate Bill 35, saying “I am very excited that the State of Indiana has recognized the importance of students learning about personal finance at a young age. With finances being one of the leading causes of stress in American society, the passage of this bill will enable students to begin being more comfortable with finances at a younger age and decrease the likelihood of financial stress later in life. This is a great benefit for students in Indiana.”
The Indiana Assets & Opportunities Network looks forward to working with legislators on the implementation of both pieces of legislation, and on future programs and policies to strengthen financial empowerment, savings for the future, and public benefits and programs for Hoosiers.
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About the Indiana Assets & Opportunity Network
Assets are the building blocks of financial security for Hoosiers of all backgrounds and identities both now and for years to come. Asset building can mean many different things to different people, but to the Indiana Assets & Opportunity Network it means financial empowerment, savings for the future, and public benefits and programs.
The Indiana Assets & Opportunity Network (A&O) connects and provides learning opportunities to practitioners and advocates committed to asset building. It is co-governed by Prosperity Indiana and the Indiana Community Action Poverty Institute and has a Steering Committee of diverse organizations that support an economy that works for all Hoosiers. Members of the A&O Steering Committee are leaders in the Indiana asset building space.