TERRE HAUTE — For one Terre Haute family, knowing they will receive tax credits as part of the federal economic recovery package comes at the right time.
“I am unemployed right now,” said Darin R. Lang, the father of two students at Indiana State University. “I was at Pfizer and was laid off in May, and then worked at McGuire Excavating [& Trucking] for seven months and got laid off in January, so this will help us tremendously.”
Lang; his wife, Sabrena; their son, Darin M. Lang, a sophomore at ISU majoring in geology; and their daughter, Sierra Lang, an ISU senior in elementary education/special education, spoke of the impact of tax credits during a visit to Terre Haute from U.S. Sen. Evan Bayh, D-Ind., on Monday.
Bayh stopped at Terre Haute International Airport-Hulman Field to discuss the economic package he supported and is expected to be signed into law today by President Obama.
“There is a clear connection today between how much you know and how much you will get paid. Statistics are overwhelming,” Bayh said.
“People who get a college degree make a much higher salary than those who don’t and increasingly the jobs we are creating require a higher degree of education.”
The package includes the “American Opportunity Tax Credit,” expected to provide 76,000 Hoosiers as much as $2,500 a year in tax credit on the cost of a college education and the “Making Work Pay Credit,” is expected to provide 2.4 million Hoosiers a refundable tax credit of $400 for workers ($800 for married couples) in 2009 and 2010.
The package also increases the maximum Pell Grant by $500, to $5,350 in 2009 and to $5,550 in 2010. This will benefit 146,000 Pell Grant recipients in Indiana, said Bayh spokesman Brian Weiss.
“For our family, a college degree means more opportunities later in life, but it isn’t easy,” said student Darin M. Lang. “Tuition costs have skyrocketed making it more difficult to pay for college. This year alone we estimate tuition costs will be as much as $18,000 for each of us,” he said of himself and his sister.
He said his family will receive a two-year benefit of at least $5,800 under the package. “This is important and meaningful tax relief for our family,” he said.
In 2007, 60 percent of Indiana students graduated with debt averaging more than $21,000. The average cost of tuition at a public four-year institution in Indiana was $6,678 in 2008 and $2,819 for a two-year institution, according to the National Center for Public Policy and Higher Education. That is a nearly 13 percent increase for four-year schools since 2006. In Indiana, 54 percent of students are enrolled in public four-year colleges and universities and 20 percent in community colleges.
Bayh said Indiana is estimated to have 75,000 jobs “saved or created because of the legislation and 145,000 students are going to get
help making college
more affordable.”
The package also is expected to help 50,000 Hoosiers with a first-time home-buyer credit up to $8,000 over two years (for individuals making less than $80,000 a year and less than $160,000 for couples) and 1.8 million Hoosiers are expected to get up to $1,100 in sales tax credit relief on a new vehicle, including recreational vehicles, bought this year.
In addition, 275,000 Hoosiers will not be affected by the alternative minimum tax, as the bill provides each with $2,000 in tax relief.
“Every person who works in the state of Indiana will receive about a $400 tax cut this year and next year. You will see that show up in your paycheck in the next few weeks in terms of lower payroll tax deductions. That is written into law and will happen,” Bayh said about the American Opportunity Tax Credit.
“Clearly our economy is not good. We lost another 600,000 jobs [nationally] just last month. Only eight states in America now have higher rates of unemployment than Indiana. So clearly, we need to get moving in terms of putting people to work, helping businesses grow and helping middle-class families meet the challenges that they face — cost of college, cost of health care, cost of energy, putting something away for retirement. These are difficult times,” Bayh said.
Bayh said the sales tax credit will help Indiana’s automotive sector, “because after Michigan, Indiana is second-most affected state by the downturn in the automotive sector.”
The senator said that while the economic package is primarily targeted for the short term, the “irony of this is we need to do more in the short run, but in the long run, we need more savings, a lower [budget] deficit and less spending.”
Howard Greninger can be reached at (812) 231-4204 or howard.greninger@tribstar.com
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Tax credits, economic recovery package on agenda for Bayh’s stops in Valley
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