Legislative Update: 1.31.25

Legislative Update: 1.31.25

We haven’t even reached the halfway point of the session, but already, things have gotten a bit… meta. Not Mark Zuckerberg’s Meta. Rather, meta in the contemplative sense.

Lawmakers and the interests they represent are digging into the big, philosophical questions of state government.

How do you fund local communities’ needs while alleviating taxpayers’ pocketbooks? How can healthcare streamline costs in a way that doesn’t compromise the quality of care or their fiscal sustainability? And how can we maintain and enhance infrastructure in an era of changing vehicle technology?

These questions are far from answered, as lawmakers continue to hash out the details of big bills – from property taxes to healthcare and road funding – in committees. Read on for more details about the discussion.

This Is the Way

In three speeches this week, Gov. Mike Braun and members of his administration provided additional insight into their vision for the next four years. That vision emphasizes the need for Mandalorian-like efficiency in government and healthcare while also highlighting the need for key infrastructure investments. 

• Reining in Taxes and Healthcare Costs: In Braun’s first State of the State speech, he emphasized the pillars of his campaign pledges by spotlighting Hoosiers who have been impacted by rising property taxes and unexpected medical bills. Braun pledged (again) to tackle both taxes and healthcare costs to rein in the cost of living for Hoosiers. Several Senate bills (see below) take aim at property tax increases. Braun has sought to address healthcare so far through a series of executive orders, and lawmakers are pursuing two bills to tighten healthcare spending (more on those follow).
• Upskilling & Resurfacing: In this week’s House Ways and Means Committee meeting, Secretary of Commerce David Adams and Secretary of Transportation and Infrastructure Matt Ubelhor highlighted the need to invest in infrastructure—both human and physical.  

  • Adams’ priority is supporting human capital, which he says is central to economic growth. By upskilling the current workforce, we can help address Indiana’s talent gap—for every 100 job openings, Indiana only has 72 available workers. Adams suggested providing tax credits to companies that help upskill workers while also spotlighting the need to invest in existing Indiana companies, entrepreneurship, and tech hubs. Adams’ orientation aligns with the Indy Chamber’s focus on talent, which we consider to be the most critical driver of economic development. We look forward to linking arms with the Secretary on the human capital push. That said, we still view attracting new companies as a key part of the state’s economic growth strategy (and something Indiana’s really darn good at). We’ll join ours to the voices pointing out that we can—and must—walk and chew gum at the same time when it comes to talent development and business attraction.  
  • Ubelhor touted the more than 18,000 miles of pavement resurfaced in FY 2024, highlighting the 94% of state-maintained roads that are in fair or better condition. To continue the momentum, he said, INDOT is going to need new funding sources as fuel taxes decline with the adoption of EV and hybrid technology. (More on that later, too.) 

Cash Clash

How do you alleviate rising tax bills for Hoosiers while adequately funding local government? That’s one of the central questions at issue this session.

This week, the Senate took up four bills designed to reform the way property taxes are collected in Indiana. All four bills—plus an additional – SB 1, which highlights Braun’s tax reform plan—remain in committee for additional discussion and potential amendments before they could be sent to the full Senate for consideration.

• Lawmakers and Braun are saying… Local governments can afford to cut, and people need relief amidst rising property values. According to the Association of Indiana Counties, statewide residential liability increased by 18% from 2022 to 2023 pay cycles. The various proposals aim to tackle this through different approaches. For example, SB 1 calls for increasing homestead deductions for homes with lower assessed valuations and capping the growth in property tax liability at 2% for seniors, low-income Hoosiers, and those with children under 18. SB 6—which garnered supportive testimony in the hearing—allows counties to set provisions for certain categories of taxpayers (to be determined by the counties) to defer payments in search of relief.
• But local government units are raising concerns, noting the impact of SB 1 to future revenue collections of $1.6 billion annually by 2028. Indy Chamber’s analysis shows that 39% of that revenue loss would be incurred in the 10-county Central Indiana region—which drives the population and GDP growth of the entire state. Government officials have voiced this impact from testimony to op-eds in key publications.
• What comes next? Lawmakers will reconcile the needs of taxpayers and the governments that provide them services and streamline the various pieces of legislation.
• Also on the table: Reductions to business personal property taxes. SB 443 calls for eliminating liability on business equipment over a three-year period and increasing the threshold for exemptions. The Chamber is neutral on this specific proposal, as we believe in reducing business costs but also want to ensure there’s adequate replacement revenue for governments to maintain services and quality of life—which are necessary to keeping and attracting the human capital Governor Braun’s administration is laser-focused on.

Wellness Check

Two bills heard this week—House Bills 1003 and 1004—aim to reform healthcare spending in Indiana, a signal that Braun has legislative support for one of his key priorities. Both are being held for further consideration and amendments.

• HB 1003 includes a variety of provisions to reduce the cost of care. Among the more controversial: putting constraints on what healthcare systems can charge for outpatient services, something that healthcare providers say would increase their regulatory burden for compliance. The bill also seeks to address Medicaid fraud and increase transparency and access.
• HB 1004 restricts what nonprofit hospitals can charge to maintain their charitable status by capping the costs to 200% of Medicare. Hospitals warn such a mandate is infeasible and will lead to a reduction of services and financial loss. But Secretary of Health and Family Services Gloria Sachdev noted that Medicare keeps up with inflation, and healthcare systems have ample reserves to help cover the costs. 

What Else We're Watching

• Truckin’: The House’s Roads and Transportation Committee this week heard HB 1461, which includes a variety of proposals for new road funding revenue at the state and local levels.  The bill calls for tolling authority, which the Indy Chamber enthusiastically supports, and this measure received broad support in the committee hearing. The bill’s author, Rep. Jim Pressel—and Senate members who will eventually consider road funding proposals—continue to welcome suggestions from stakeholders. The bill will be heard again on Feb. 10. If voted out of the Roads and Transportation Committee, the bill will be recommitted to House Ways & Means where members will consider the fiscal impacts of the legislation. Road Funding conversations will be ongoing this legislative session and the Indy Chamber welcomes your feedback on this proposal and other options to fund Indiana roads. 
• Respect the Hustle: Small business owners are getting more champions in state government. An amended version of HB 1172, which establishes the Office of Entrepreneurship and Innovation that is designed to support small businesses, passed out of the House’s Commerce Committee.  

We Need Your Voice

Reducing Indiana’s smoking rate would reduce healthcare and tax costs, generate new revenue, and save lives. Increasing the cigarette tax by $2/pack is a proven way to reduce smoking, and the Indy Chamber is continuing to advocate for this increase.

SB 394 (Various Tax and Fiscal Matters) from Sen. Fady Qaddoura will be heard Tuesday in the Senate Tax & Fiscal Committee, chaired by Sen. Travis Holdman. Tax and Fiscal members need to hear from you! The bill includes a number of provisions, including a $1 per pack increase to the cigarette tax.  

Please take a moment to email a member of the Committee to let them know the costs of tobacco on Hoosier households and businesses and the need to increase the cigarette tax by $2 per pack. We’ve created messages and sample emails here to make it easy.