Legislative Update: 3.7.25

Legislative Update: 3.7.25

As Gainbridge Fieldhouse welcomes the Big Ten Women’s and Men’s basketball tournaments, we’re sitting courtside a mile west watching the legislative state of play.

Lawmakers reconvened this week and immediately jumped into some of the most complex and heated issues of session: property taxes and school funding reform. But they’re still dribbling, so to speak, on both issues: no votes were held after almost nine hours of testimony in the House Ways & Means Committee. Expect both topics to reappear over the next few weeks as lawmakers make a full-court press to resolve them before Sine Die in April.

Here's what else is playing out this week:

Go Spartan

As two liberal arts alums, we have little bias when it comes to Big Ten teams. But it would be hard not to single out the Michigan State mascot, whose nod to thrift and lack of frills mirrors the current discussions around Indiana’s biennial budget.

• Court Switch: As we’ve mentioned previously, the House passed its version of the budget last month—a $46.7 billion general fund proposal that’s lean and increases spending by only 5 percent in light of a modest revenue forecast and decreases in pandemic-era funding. That budget now heads to the Senate Appropriations Committee, which will hear testimony from the state’s universities and agencies before releasing its version of the budget. Both chambers must align on a final plan by the end of April. 

  • Want a refresher on how the budgeting process works? We got you.

• Changing the Game Plan: Much of what ends up in the final version of the budget will depend on information we don’t yet have—revenue forecasts that will be released in April. Those are expected to be modest, mirroring the forecast from late last year.
• Our Fan Plug: We’re cheering on the cigarette tax, pushing for a $2 increase to be amended into the budget before the end of session. Senate President Pro Tempore Rodric Bray recently said the cigarette tax is part of the conversation but made no guarantees that it will make it into the final version. Lawmakers’ reservations come as they are trying to constrain the growing Medicaid budget and worry that additional revenue from the tax would incentivize Medicaid growth.

  • But it’s important to note that raising cigarette taxes by $2 per pack has proven to reduce smoking rates, with a projected 45,000 Hoosiers quitting smoking. That would reduce healthcare spending and generate $795 million in long-term health savings.

• Speaking of Game Plan Changes: A report released last week showed Indiana is the third most reliant state in the nation on federal funding, with 44 percent of the Hoosier State’s budget coming from federal dollars. As the federal government implements and considers cuts to its expenditures, some Indiana dollars could be put at risk. Among the items on the line could be Medicaid funding. A new U.S. House-passed budget resolution tasks a spending committee to reduce Medicaid spending by $880 billion by 2034. If per-capita cuts are implemented, Indiana’s federal Medicaid allocation will be reduced by $12.7 billion.

Removing Hoops

A trio of childcare-related bills will get hearings next week in House and Senate committees. All three aim to expand access and affordability to childcare for families by reducing regulatory barriers and carving out provisions for certain groups to receive childcare vouchers.

That would be a jump-shot for Central Indiana employers, who are among the fiercest childcare advocates. Lack of reliable childcare hinders parents’ ability to work at a time when the labor market is tight. Here are the key players:

• HB 1248 (Child Care and Development Fund) makes foster parents eligible for Child Care and Development Fund (CCDF) vouchers and holds 200 spots for foster youth.

  • ✅ It will be heard Monday, March 10, at 10 a.m. in Senate Family and Children Services. 

• HB 1253 (Child Care) makes it easier for multi-site childcare providers to add new sites by creating a new license category for them. That would allow multi-site operators to fill out a single application, pay one licensing fee, and avoid redundancy in the application process for more than one location operated by the same owner.

  • ✅ It is scheduled to be heard in Senate Family and Children Services on Monday, March 10 at 10 a.m. 

• SB 463 (Child Care Matters) builds upon legislation passed last year authored by Sen. Ed Charbonneau to help reduce regulatory burdens on the childcare sector and increase the number of childcare workers. It extends the availability of employer childcare tax credits and allows childcare centers to maintain staff-to-child ratios comparable to those of neighboring states (Illinois, Kentucky, Michigan, and Ohio). It also expands a program for creating “micro facilities” that serve between three and 30 kids with fewer regulations under the oversight of the Family Social Services Administration.

  • ✅ It will be heard in the House Family, Children and Human Affairs Committee on Wednesday, March 13, at 8:30 a.m. 

Offense & Defense

Nearly nine hours of committee testimony showed the passion surrounding two key issues this session: property tax reform and school funding. Advocates on both sides of the debate were vying for the basket.

•  Tax cuts on defense: The property tax bill, SB 1, continues to be a work in progress. After testimony from local government interests and school corporations warning that property tax reductions will threaten local services, House Ways & Means Committee Chairman Jeff Thompson indicated the House will likely take public testimony at two more meetings. The next meeting will focus on the language found in HB 1402 (which increases relief for homeowners but offsets that relief with increases in other areas), and the following meeting will focus on amendments from other committee members.
• Fighting for position: Over 100 people signed up to testify in support of and against SB 518, which would allow public charter schools to receive local property taxes as district schools do. It excludes districts where fewer than 100 students attend a brick-and-mortar public charter school. Traditional school districts—including Indianapolis Public Schools—warn that such funding changes would threaten schools’ ability to serve students. However, charter advocates note that 60 percent of parents within IPS boundaries are choosing public charter or Innovation Network Schools, which serve a large share of students from low-income communities and students of color. Charter schools in Indianapolis operate with 42.5 percent less funding than district-run schools.

  • ❌ No action was taken on the bill.

Watching the Shot Clock

We’ve not made it to the fourth quarter of session yet, but we’re keeping our eye on the ball to ensure the issues that matter to members make it down the court. If you want to follow along in more detail than we provide in this email, you can check out our issue trackers, linked below:

• Transportation, Infrastructure, and Environment
• Local Government and Fiscal Policy 
• Healthcare 
• Education and Workforce