Tough Love

The Valentine’s Day week has been far from a lovefest at the statehouse. Committees tackled some of the most controversial bills remaining on the legislative docket and clashed on a number of important issues–starting with a key Senate panel putting the high-profile House tax plan in the fiscal friendzone.

The Tax & Fiscal Policy Committee showed no love for HB1002 on Tuesday, stripping $1.4 billion in future tax cuts out of the bill. The slimmed down version retained language consistent with SB1, ensuring all individual filers receive this year’s automatic refund—not just those with a tax liability. (Speaking of SB1, the bill passed the House and heads to the Governor as a standalone measure.)

The Senate amendment also inserts provisions from SB390 putting stricter limits on local food & beverage and innkeepers’ taxes. (We generally oppose taking away flexibility on local hospitality taxes.)

Even the tightest relationships are tested by differing views, and this session has featured more high-profile showdowns between the House and Senate supermajorities than usual. Beyond tax relief, the right path out of the COVID health emergency—while protecting workplaces and the public-at-large—has sparked vigorous debate featuring a pro-business breakthrough this week.
But let’s start with a good news/bad news update on education legislation…

Let us count the ways:
There were plenty of reasons not to love HB1134: Its policing of open classroom discussions of race and diversity, imposition of time-consuming new mandates on teachers and administrators, and enforced blindness towards the systemic challenges that impact students who often need the most supportive learning environment to succeed—and from an employer’s perspective, its potential to leave Hoosier students unprepared to thrive in a complex, inclusive economy.

But the bill got a makeover in the Senate this week, as its sponsor swapped much of its substance with a new proposal that eases many of those concerns. The amendment simplifies transparency requirements, makes curricular advisory groups voluntary, and creates a parental grievance process through the Department of Education (rather than empowering costly lawsuits).

The revised HB1134 keeps a slimmed-down list of ‘divisive topics’ that includes a prohibition against teaching that “individuals, by virtue of their traits, are inherently responsible for the past actions of others who share their traits.” This could be broadly interpreted to stymie frank acknowledgements that historic injustices still impact our lives today, but the threat to diversity, equity, and inclusion lessons is much more remote.

We can say that tough love from education advocates led to a much improved bill that could see additional changes after being heard and held in committee Wednesday.

A fail for fair play:
Sadly, the same can’t be said of HB1041, which threatens to deprive some young Hoosiers of the opportunity to compete in the sports they love. The bill effectively bans transgender athletes from school athletics. It passed committee on Wednesday for consideration on the Senate floor.

Rushing to exclude certain kids from the rosters of school sports teams is unworthy public policy that would provoke unnecessary economic backlash. If Indiana becomes the 11^th state to enact such an exclusionary policy, it will put a negative spotlight on the state among businesses who rightfully value diversity and equal protections for employees and their families. It will discourage decision-makers in the convention and hospitality sectors, not to mention workers looking for a welcoming and inclusive marketplace for their talent.

This unfortunate proposal deserves a defensive stop on second reading.

Game of inches:
Football season is over (sorry, Cincinnati), but the metaphor fits: Sometimes the legislative process is about grinding out progress on the ground, fighting over every inch of turf. The evolution of HB1001 and SB3 has been like that as the private sector and public health advocates pushed back against attacks on employer authority to protect their workplaces by requiring COVID vaccinations.

Anti-vaccine language in HB1001 was eased in the House. Businesses scored modest wins with the ability to seek reimbursement for COVID testing mandates and removal of a proposed employer penalty via the unemployment insurance system for vaccine-related employment actions. But a “no questions asked” religious exemption remained as a major loophole to vaccine requirements.

We gained more ground in the Senate this week with significant committee amendments to the bill. Now, HB1001 aligns with federal civil rights rules on religious exemptions, directing employers to provide reasonable accommodations or demonstrate undue company-wide hardship.

This is a big improvement, along with changes to clarify that healthcare workers fall under a federal vaccine mandate and strengthen the ability of sports organizations and entertainment venues to require vaccinations to avoid conflicts with visiting entertainers and athletes (and given their unique level of engagement with the public-at-large).

So why aren’t we describing this committee action in a more celebratory tone? Well, the amended HB1001 still faces floor votes and a negotiated compromise with the House. We’ve moved the ball, but the end zone still lies ahead.

Wrapping up the rest of the week:

• HB1359 (juvenile justice reform) passed its first Senate committee on Monday in a step forward for data-driven policies and expanded services supporting the success of young Hoosiers as they transition from the Department of Corrections. (The bill was reassigned to Appropriations but should still receive wide bipartisan support.)
• Also on justice reform, HB1004 increases flexibility for the incarceration of Level 6 felons, a measure that could help relieve local jail overcrowding and fiscal strain while improving access to substance abuse programs for those with drug offenses. It passed committee on Thursday.
• HB1193 indirectly deals with jail capacity and substance abuse challenges as well—as the opioid epidemic helped drive the spike in Level 6 felony convictions. The bill adjusts the formula allocating Indiana’s share of the national opioid settlement, hoping to lure more local governments into accepting the state’s terms and increasing total funding for treatment and abatement programs. It passed committee on Thursday.
• SB245, authorizing a statewide sports and convention bid fund, passed Ways & Means on Wednesday, as did SB166, expanding public-private financing of transportation logistics projects in urban areas.
• HB1094 creates more opportunities for high school internships, co-ops, and experiential learning by addressing employer liability for student workers. It was overshadowed by more controversial topics on Wednesday afternoon but got a unanimous vote out of committee.
• We haven’t had much opportunity to highlight the issue of pregnancy workplace accommodations this year, but we are pleased that HB1140 expands Medicaid eligibility for pregnant women and postpartum services for new mothers a year after delivery. It passed committee on Thursday.
• On another healthcare matter, the Senate passed HB1003 on third reading, sending it back to the House with amendments; the bill adjusts practitioner and faculty licensing requirements in an effort to address the state’s nursing shortage.
• After the Senate stripped HB1002, we’re waiting to see what the House does with SB361, the economic development plan crafted by Senate fiscal leaders that tweaks some of the state’s existing tax credit programs and adds new incentives for film production projects, attracting remote workers and creating state-local tax increment districts to lure major projects. It awaits a vote in Ways & Means, and we’ll likely have more to report next week – specifically on the innovation development district piece.