As the end of April comes into view and the deadlines for final reading of bills in the Indiana General Assembly having passed this week, legislators have a little over “One Day More!” to ensure their priority bills make the cut. Happily, like members of a Broadway audience when the intermission lights flicker, the Indy Chamber’s priority bills made it to their seats before the curtain closes on the 2023 legislative session. Read on to see which ones will have the Hoosier state humming for years to come in this week’s update: The Broadway Edition.
We’re in the Money
Arguably the two biggest news items out of the Statehouse over the past two weeks were last week’s release of the Senate budget proposal, which reflected some careful and disciplined thinking from Senators about how to ensure Indiana’s show goes on, and this week’s especially rosy state revenue forecast. Projections presented Wednesday to the State Budget Committee show Indiana will collect $1.5 billion more in General Fund tax revenue over the next 26 months compared to the December 2022 estimates legislators have been using to craft House Bill 1001.
Approximately $390 million of the new money is due to come in during the current budget year that runs through June 30. But the bulk of the additional resources, or $1.1 billion, will be available to spend during the 2024 and 2025 state budget years, along with any surplus from 2023.
With analysts predicting a downturn ahead for the U.S. economy, though, it’s not clear what Indiana’s lawmakers will do with the extra cash. If we were rich men... people (yaba deebee deebee deebee deebee deebee deebee dum), we know one thing we’d do for sure: increase investment in public health to the levels suggested by the Governor’s Public Health Commission last year.
Like the House budget proposal, the Senate budget currently allocates $225 million to help strengthen public health services across Indiana. Our best guess for a final number is somewhere between $185-$225 million over the biennium. While this is no doubt an important investment, it’s worth noting that it’s less than Governor Holcomb requested, and less than half the annual amount the Public Health Commission said is needed.
The Indy Chamber has stressed the business case for investing in Hoosiers’ health, but for a clear picture of what insufficient investment in public health is costing Indiana, look no further than the growth of the state’s Medicaid costs. As Senate Appropriations Chair Ryan Mishler pointed out last week, Indiana’s Medicaid budget is growing faster than our education budget—a scary situation directly attributable to our collective failure to invest in preventive healthcare. For the moment, at least, the Senate’s budget fully funds Indiana’s two-year, $4.5 billion Medicaid cost forecast. But you don’t have to be Benjamin Franklin to know that an ounce of prevention is worth a pound of cure, nor do you need to be an economist to guess how the looming swell of Baby Boomers heading into retirement like the unseen tsunami in Poseidon Adventure: The Musical is going to impact Indiana’s Medicaid tab in the coming years.
The good news, according to one plucky little redhead, is that the sun will come out tomorrow—and with it comes a chance to change the course of Indiana’s future for the better. It’s important to understand, when it comes to public health, that the relationship between dollars invested and results achieved doesn’t exist on a perfectly proportional sliding scale. Instead, think of public health dollars more in terms of concentration. We must make sufficiently concentrated investments in public health to see meaningful improvements in Hoosiers’ health.
That we’re having this conversation at all illustrates both the scale of the need in Indiana and the quality of the public health advocacy that’s brought us to this point. What’s clear is that the state of public health in Indiana requires investment of the full amount recommended by the Public Health Commission. Will Indiana’s tax revenues continue defying gravity? We can’t say for sure. But we can say that failing to scale up public health investments using the current revenue surplus is throwing away our [best] shot at improving Hoosiers’ health for years to come.
We were very happy to see that SB 1, Senator Mike Crider’s determined effort to scale up mental health and crisis services in the state and an Indy Chamber priority bill this session, is included in the Senate’s budget to the tune of $35 million over two years. Although we would have preferred to see a larger investment, this is a good start to some critically important work for the Hoosier state. Still to be decided is what, if any, fee will be added to Hoosiers’ cell phone bills to help pay for Indiana’s new 988 suicide and crisis hotline. Unfortunately, in our view, the Senate disregarded a call from the House (and others) to increase Indiana’s cigarette tax as a vehicle for funding improvements to our public health and mental health systems.
As noted in the IBJ last week, Indiana’s cigarette tax is the 39th-lowest in the U.S. In fact, Indiana’s Senate has not agreed to an increase in the cigarette tax since 2007, and the idea of an increase continues to be the kind of “Impossible Dream” Don Quixote sings about in Man of La Mancha.
Other important healthcare developments to come out of the General Assembly in the past two weeks include:
525,600 Potholes...How Do You Measure, Measure a Mile?
Whether you measure them “in inches” or “in [spilled] cups of coffee” as suggested by Rent’s most famous earworm, the Indy Region’s roads are in need of repairs. The Indy Chamber team has advocated for the state to invest in road improvements for Central Indiana since before the start of this session. While we didn’t see the type of generational investment that’s needed, we’ve been pleased to see small steps in this direction.
One such step is SB 283, which allows residents of Marion County’s “excluded cities” to be tallied in the county’s population figures used in the state’s road funding formula.
Another positive step is the Senate’s creation of the Funding Indiana’s Roads for a Stronger, Safer Tomorrow taskforce. The taskforce’s assignment will be to develop a long-term plan to address state highway and bridge needs. Legislators also approved an amendment to House Bill 1050 to allow the current one cent ($ .01) per year increase on the state’s gas tax to continue into 2025. While tax increases are generally anathema to legislators who want to be pop-u-hu-lar, given the conditions out here on the streets where we live, we’re all for this one.
School of [Sheet] Rock
As you’ve likely read, the Senate’s budget did not include funding for the House’s proposed $1.1B expansion of the Choice Scholarship program (the Senate also did not relax income eligibility requirements for the program, as did the House budget). Less talked about last week were the cuts the Senate’s budget made to funding for career and technical education programs in Indiana high schools. It’s entirely possible that move was in preparation for negotiations over HB 1002 and that funding may be restored, possibly in a new form.
Regardless, this seems like an opportune moment to mention the Indy Chamber’s hope for a system of work-based learning and career exploration for high school students that is robust, well-resourced, and—most importantly—easily navigable for students, parents, employers, and community partners. Here’s hoping that kind of program finds its corner of the Hoosier sky.
The Senate’s budget did include funding for a number of Indy Chamber priorities around youth and K-12 education. For starters, it includes a tax credit for employers who pay to help employees obtain childcare, and it expands eligibility for On My Way pre-k by raising the income limit to 150% of the federal poverty level for a family of four. It also provides funding to support schools that choose to provide textbooks to students free of charge.
Senators also attempted to resolve the ongoing conflict between traditional public schools and charter schools over whether, and how, revenue from property tax referenda should be shared. Under the Senate’s plan, charter schools will have the ability to opt-in to a tax-sharing model provided they: 1) forgo the customary charter school grant, and 2) comply with certain transparency requirements, such as adopting an annual budget in a public meeting.
Hey, Big Spender
We half expect to see the staff of the Indiana Economic Development Commission singing “Somethin’s comin’, somethin’ good” from West Side Story as this session heads for its big finale. IEDC’s READI program, now renamed Collaborative Communities, is slated to receive $500M over the biennium, and promises to continue its impact of delivering much needed capital to impactful development projects around the state. Today’s economic development marketplace is laser focused on talent, and the investments in Collaborative Communities are instrumental to enhancing livability and opportunity in Hoosier cities and towns. This is how Indiana accelerates our competitiveness for talent and investment in a now global playing field.
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