Legislative Update: 2.7.25

The Super Bowl’s not until Sunday, but at the Statehouse, we’re already honed in on halftime.

Legislative halftime, that is.

By Feb. 20—less than two weeks from now—bills will have had to be heard in committee and approved by either the House or Senate in order to advance to the other chamber for consideration. We’re watching which bills are moving and which ones are not with the attentiveness of a Swiftie eyeing Travis Kelce.

Bills, Bills, Bills

Given halftime’s approach, several pieces of legislation the Chamber is following will be heard in committees next week. Here’s what’s on our radar:

• Road Funding: On Monday, the House Roads & Transportation Committee will take up HB 1461. As previously noted, it includes a variety of new tools to increase road funding revenue, including tolling authority, which the Indy Chamber enthusiastically supports. We expect some significant changes to the bill in committee—now is a good time to continue the push for progress on more dollars in the statewide road funding formula and specific solutions to address the $2.4 billion local need. We’d invite you to reach out to Rep. Jim Pressel ahead of next week’s hearing.  
• Property Tax Relief: SB 1, which currently mirrors Gov. Mike Braun’s property tax relief plan, will be amended and voted on in the Senate’s Tax & Fiscal Policy Committee on Tuesday. As introduced, it calls for tax relief via 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. However, these changes would result in a significant loss of revenue (over $1.2 billion annually beginning in 2026 and up to $1.6 billion by 2028) for local units of government that are concerned about funding essential services.  
• School Property Tax Sharing: Also on Tuesday, Senate Tax & Fiscal Policy will hear SB 518, which would provide public charter schools access to local property tax dollars, a move that charter advocates have long championed. This would be a significant fiscal shift, particularly in Marion County.
  • The Indy Chamber will remain closely engaged in this discussion to ensure any policy changes would support world-class student outcomes and fiscal accountability.  

A Crazy Game of Poker

Budget negotiations are looking like Texas Hold ‘Em—and not the Cowboy Carter Beyoncé version. The House Ways & Means Committee heard nearly six hours of testimony this week on HB 1001, which outlines priorities for the approximately $46 billion the state will spend over two fiscal years. The pot is finite, and the stakes are high. The bill’s current iteration reflects Braun’s budgetary priorities and will be amended in the coming weeks.

• Hand We’re Dealt: The introduced budget includes full funding for the Medicaid program, eliminating the wait list for childcare vouchers, and tasking state agencies to find 5% savings to cover priorities. However, it also reduces funding for core Chamber priorities like the Sports Corp Bid Fund and funding for direct flight development, two investments that have paid massive dividends for the state historically. Though we understand the streamlined approach in a tight fiscal climate, those two programs are perfect examples of incredible ROI for state investment.
• Cards on the Table: Public testimony included a number of priorities that are not currently included in the bill, such as trails, military base investments, dual-immersion programs, mental health initiatives, and the Dolly Parton Imagination Library. Others encouraged lawmakers to increase the state’s cigarette tax, which is currently among the nation’s lowest, by $2 per pack as a means of raising additional revenue.  
• All In: The bill will be amended in the House Ways & Means Committee before going to the full House, which will have the chance to offer additional amendments.

Help Wanted

Indiana needs to scale up its skilled workforce, and legislators are trying to do their part.

Consider the numbers: There are 140,000 unfilled jobs in Indiana. The next 25 years are projected to add a mere 110,000 additional skilled workers to the state’s labor force, leaving a 30,000-worker gap. That’s why lawmakers have focused on getting more Hoosiers the training and skills they need through programs like career and technical education (CTE), adult education, and apprenticeships.

Now, lawmakers are taking stock of whether these programs are working and making adjustments to ensure apprenticeships get filled in the industries where they’re most needed.

• CTE and Adult Education Audit:SB 365 requires the Indiana Department of Education and Indiana Commission for Higher Education to track CTE program completion and how many students remain in their fields of concentration after graduation. The bill also requires reports on the “return on investment” of adult education programs by looking at factors such as program availability and quality, student participation, and market demand for graduates.
  • ✅ The bill passed out of the Senate Education Committee this week. 
• Apprenticeship Alignment: We told you before about SB 448, which requires the Secretary of Education to prepare a plan to prioritize industries apprenticeships should be focused on, based on sector needs. It also requires the Management Performance Hub to annually report the number and type of credentials needed to fill employment openings—data that could help nudge employers to embrace apprenticeships.  
  • ✅ It also passed out of the Senate Education Committee.
• Speaking of education… Teachers are an integral part of Indiana’s workforce, not to mention the largest school-based factor in student success. HB 1500 amends a program awarding grants based on performance, intending to provide support that keeps highly effective teachers in the classroom. While the bill received some pushback from teachers’ unions, who said it should include all teachers, the bill’s author, Rep. Bob Behning, said that based on the amended criteria, 90% of Indiana teachers still qualify to receive the grants. 

Setting Boundaries

Three years ago, lawmakers gave Indiana economic development leaders a robust new tool to be competitive. Now, they are taking a fresh look at that authority with the aim of reining it in.

• The Background: In 2022, state lawmakers created the Innovation Development District (IDD) for the Indiana Economic Development Commission to create incentives for large-scale, fast-moving development projects. The tool works much like a local tax-increment financing district by capturing state and local income, sales, and property tax increases generated by the new development. So far, the new practice has one use case: Boone County’s LEAP Research and Innovation District, which includes billions of investment from Eli Lilly & Company and Facebook parent company Meta and $60 million from the IDD. 
• The Latest: Now, lawmakers—including Appropriations Chairman Ryan Mishler, who championed the IDD bill—are taking a closer look at the scope of IDD’s. New guardrails, laid out in three Senate bills, include setting a minimum private investment threshold of $750 million and capping the amount the IDD can capture at $15 million or 10% of the project cost. In its current form, the bill also requires specific universities to partner on the project, but that provision may be amended as the main bill, SB 494, was held in committee for additional iteration.
• If you’re wondering, are lawmakers saying, “IDK about IDDs”? The answer is that they are supportive of the tool but want to refine it. This is not an effort to nix IDDs but rather a way to set boundaries so the state can capture revenue while setting aside funds for economic development.

What Else We’re Watching

• DEI Debate: A controversial Senate bill that bars mandatory DEI initiatives from K-12 schools, public universities, and state agencies passed the Senate this week after three hours of contentious debate. SB 289 prohibits schools from requiring DEI training, restricts such programs at public universities, and bars state agencies from funding DEI offices. It also mandates that recipients of state grants or contracts “will not require its employees, contractors, volunteers, vendors, or agents to ascribe to, study, or be instructed with DEI material with respect to state funds,” and it gives the state’s attorney general enforcement authority. 
  • Four Republicans joined Democrats in opposing the bill, and many raised concerns about the unintended consequences of such legislation. “I do not believe that the intent of any of the authors of the legislation is to be racist in any way,” said Sen. Andrea Hunley. “What I do believe is that this bill is creating confusion, that it’s sowing division, that it’s making people feel unseen.” 
  • The bill’s authors, Sen. Gary Byrne and Sen. Tyler Johnson, argued the bill is about treating everyone equally and emphasized that individuals could still pursue voluntary DEI training. “What I don’t want is the government to say that everyone with a certain trait should automatically get preferential or adverse treatment,” Byrne said. 
• Election Timing: There’s a push to increase the prominence of local ballot initiatives and municipal elections in Indiana by moving their timing, but it’s unclear how it will all shake out.  
  • Some want to require that referendums to levy additional property taxes for schools take place only during general elections, addressing a critique that primary turnout is too low to represent voters’ views. HB 1681, which calls for this, was voted out of the House Elections Committee this week.  
  • In the other chamber, SB 8 would require that referendums take place only in even-numbered years, which hold higher profile elections.
    • ❌ It has been introduced but not yet moved out of committee.  
  • There’s also a push to move municipal elections to even-numbered years, but SB 355, which calls for this and passed out of the Senate Elections Committee this week, also gives municipalities the ability to keep their elections in odd-numbered years (which, local leaders say, enables them to keep distance from hotly debated national issues). As introduced, HB 1633 would have required municipal elections to be held in even-numbered years but that requirement was removed by amendment on the House floor and the legislation now requires the Secretary of State to study the cost-savings of moving municipal elections to even-numbered years.