Legislative Update: Referendum Reboot, Home Rule Overruled

Let’s put this as tactfully as possible: There’s a healthy tension between the General Assembly and local officials around ‘home rule’ issues.

This week showcased the up-and-down dynamics among the state legislature, schools, cities and counties.  We made progress on some priorities for our region (and our state’s largest school district) but saw other priorities get derailed by legislative meddling.  Pre-emption of local control (often at the behest of outside interests) is a growing epidemic, even by erstwhile defenders of government ‘closest to the people’ (just look at the trio of bills aimed at occupational licensing – HB1245, and SB419 and 399, described later).

Schoolhouse Rocked
There’s been a healthy debate recently about the financial plight of the Indianapolis Public Schools – pushback on the size of the district’s referendum request, tempered with the need to close its budget gap and protect progress on graduation rates, test scores, innovative school options and career-focused programs.

The district needs more revenue to avoid losing good teachers and sacrificing academic gains.  But the Chamber’s IPS Operational Analysis has saved millions of dollars a year; a new and broader review of the district’s plans can find new ways to do ‘more with less.’  The referendum’s potential impact on taxpayers and the economy demands a thoughtful process with broad support for a long-term solution.

That is why the IPS board has voted to withdraw the proposed referendum from the May election (eying the November ballot).  In the meantime, the Indy Chamber will work with  the district’s leadership to build a broad coalition of community leaders to take another hard look at the numbers and the strategic and operational needs of IPS – and share the results with the public in advance of a potential November vote.

(Michael Huber and IPS Board President Michael O’Connor describe the path forward in the Indy Star.)

State & Local Government 101
The IPS referendum is a local issue tangled up with the legislature.  State funding hasn’t kept up with current expenses or future aspirations for IPS, with a funding formula that disadvantages urban districts and a single official ‘count day’ for enrollment that has wreaked havoc with budgets across the state (hence the need for the K-12 ‘bailout’ from the general fund in HB1001 and SB189).

There was movement on productive proposals to align school curricula with the state’s high-tech economy.  SB172 passed the House and the amended version was agreed to by the Senate, requiring schools to offer classes for a computer science curriculum and creating the Next Level Computer Science Grant Program and Fund for teacher development programs in computer science.

This was a much better use of legislative time and energy on education than, say, trying to overrule local school boards and education experts on fall semester start dates.  Which brings us to Senator Mike Delph.

Politicizing Potholes
In another example of the Home Rule being overruled, Senator Mike Delph introduced a poison pill amendment to HB1080 mixing up transit in the politics of patching up potholes.

HB1080 would have lifted the ban on light rail projects in Central Indiana (part of a compromise to gain initial authority for regional mass transit expansion).  While the Marion County Transit Plan uses expanded bus service and bus rapid transit routes to connect people, employers and neighborhoods, the region deserves the flexibility to consider light rail as we look towards the future.

Senator Delph’s passion for street conditions without providing an actual solution (considering his vocal opposition to the widely-supported gas tax last session) led him to call for diverting dedicated transit dollars and maintaining rail prohibition without a written local plan for funding and fixing potholes (which already exists)– effectively killing the bill for this year.

Software Success
Transit and walkable development appeal to skilled Millennial workers – the talent that fuels high-tech growth.  But even though the demise of HB1080 is a setback, Indiana did score a business climate win for our technology industry this week – on a state tax issue that actually did belong in the hands of the General Assembly.  The Senate voted 49-0 in favor of SB257 on Tuesday, sending the bill that exempts “software as a service” from Indiana’s sales tax to Governor Holcomb for his signature (which he’s said is forthcoming).

Rollercoaster Ride
The last two weeks of the session is enough to give you whiplash – second and third readings, conference committees getting underway, and maneuvering over how to resurrect dead or dying bills.  For example, the Chamber-supported plan to help ex-offenders re-enter the economy by qualifying for SNAP benefits looked very perishable a couple of weeks ago, but was brought back as an amendment to HB1317 – stay tuned.

And there were more twists and turns in the legislature’s love-hate relationship with local control: Allowing Indianapolis to create flood control districts (an important move for the city, as described last week in SB386) but working to pre-empt local action local authority on short-term rentals (like Air BNB) and occupational licensing (HB1245, which heads to conference committee).

Here’s what else happened in an action-packed five days:

SB224 - BEHAVIORAL HEALTH AND HUMAN SERVICES – bill passed the House with new language allowing for employer immunity from negligent hiring claims when an employer hires an employee with a positive drug test (if the employee seeks treatment) – the language survived conference committee in a win for employers and a more inclusive workforce.

HB1002 & SB50 - WORKFORCE DEVELOPMENT – the stripped-down House workforce bill (HB1002) passed the Senate with more changes: Members were added to the governor’s workforce cabinet, a sunset provision for the Workforce Skills Fund was removed, and some nursing education requirements were loosened.  The bill went to conference committee with its Senate companion, SB50; but the two will remain separate.)

SB419 - PROFESSIONAL AND OCCUPATIONAL LICENSES —the bill to preempt local licensure decisions in areas of state regulation was thought dead in the House, but became the vehicle to address Dream Act licensing (as we described last week).  In this new form, it passed the full House (88 – 8) on Monday.  There is a motion to concur with the House amendments filed in the Senate.

HB1278 - ECONOMIC IMPROVEMENT DISTRICTS – the EID bill passed out of the Senate on third reading this week by a 43 – 6 vote.  The House voted to concur with the Senate amendments on a 56 – 11 vote.  The bill should now go to the governor to be signed.

HB1341 - AUTONOMOUS VEHICLES – the bill passed as amended out of the Senate with new additions around criminal penalties for operating an autonomous vehicle (or letting it operate itself, we suppose?) and liability insurance requirements that triggered a House dissent.  It’s set for conference committee Monday.

HB1399 - ELEMENTARY SCHOOL TEACHER CONTENT AREA LICENSES – this made the grade with the Senate and moves on with concurrence from the House; it creates new content area licenses which include an (1) elementary mathematics specialist license; and (2) elementary mathematics teacher license or an elementary mathematics and science teacher license.

HB1421 - SCHOOL DISCIPLINE – This bill seeks to reduce harsh disciplinary procedures for students and, as a result, increase academic outcomes.  It passed the full Senate as amended on third reading with a 46 – 3 vote.  The House concurred with the Senate changes with an 80 – 0 vote.