Legislative Update: 4.11.25

We’re T-minus 2.5 weeks until the end of session, and—perhaps not surprisingly in this budget year—the most dominant issues at this stage are all about the Benjamins.

Discussions over money—from the budget to how much money property taxpayers and local governments should keep, to how much the state and communities must collect to fund roads—were this week’s focal point.

Bills that didn’t move out of committee by Thursday, April 10, will not advance. Meanwhile, nearly 100 bills have already been sent to Governor Mike Braun to sign into law (you can track them here).

Here’s what we will be watching in the home stretch of the session:

Never Count Your Money When You’re Sittin’ at the Table

When a bill gets passed out of its final committee as many did this week, it’s a major milestone. But we’ll take this moment to remind readers that much can happen in the next two weeks—and nothing will be final until Sine Die on April 29 (or potentially sooner).

A process reminder: If a bill was amended by the opposite chamber from which it originated, it becomes eligible for conference committee. And the conference committee process can be, shall we say, involved.

If the original bill author agrees with the changes made in the second chamber, it’s mostly smooth sailing. The author will “concur” with the changes, and both chambers must vote to approve the concurrence. (A chamber can defeat a concurrence, but it’s rare.)

Things get more complicated if the original bill author does not agree with the changes or wants to further amend their bill. The author then must file a dissent and work through the changes via conference committee. Once these changes are negotiated, a conference committee report is adopted and must be approved by both chambers.

The process may sound boring, but in practice, it’s a critical point in the legislative session where concepts that didn’t previously move forward can be inserted into bills.

The lesson? Don’t go on a spending spree until it’s all over. Stay tuned for updates over the next two weeks.

Moneyball

Much like the Moneyball principles that go into developing a top sports team with limited funds, the theme of this year’s budget-making process can be summed up as making the most of limited resources. This week’s budget from the Senate was no exception. While it offers some variations from the House-passed version of the budget, the chambers’ versions align on many core principles and embrace the same ethos of efficiency. Lawmakers will negotiate the discrepancies between their versions of the budget until the last days of session.

Highlights from the Senate-passed version include:

No Universal Vouchers: While the House-passed version of the budget included $170 million to provide private K-12 vouchers for all Indiana families, the Senate bill removes the additional funds. This means that the current law, which provides K-12 vouchers for families making up to $220,000 per year, would stand, and higher-income families would not qualify.
Funding for Medicaid and Public Health: Nearly a quarter (22%) of the $46.8 billion budget would go toward the state’s share of Medicaid. The Senate budget fully funds the Medicaid forecast at $10 billion over the biennium, a $2.1 billion increase over two years. It also funds two health initiatives supported by the Indy Chamber: community mental health at $100 million over the biennium and Health First Indiana at $200 million over two years. It requires that 90% of the local public health funding be spent on core public health services, such as chronic disease, maternal and infant health, and more. Though language in the amendment removes tobacco prevention and cessation and emergency preparedness as eligible core public health services. Funds may also only be used for Indiana residents who are legal citizens.
Childcare Funding: The Senate’s version of the budget also would pare back who qualifies for childcare subsidies from the current income cap of $48,500 for a family of four to about $41,000. This restores qualifications that were in place two years ago before expansion and helps address a waitlist that Gov. Eric Holcomb’s administration announced late last year.
Hoosier Workforce Investment Tax Credit: Like the House-passed version, the Senate’s budget includes a tax credit available to Indiana employers who offer their employees training and elevate their pay by at least 25% and above the average annual wage in the region. Employers with at least five employees qualify to apply to the Indiana Economic Development Corporation for the credit and can receive up to $5,000 per employee for up to 10 employees. The budget for the program is capped at $4 million per fiscal year.
Regional Economic Development: The Senate also included a requirement in the budget that would require Indiana Secretary of Commerce David Adams to develop a collaborative framework with regional economic development organizations to identify and implement targeted, actionable economic growth strategies on a regional basis. This work would begin in June 2025 and be completed in June 2026.
Innovation Development District Changes: The Senate amendment to the budget includes changes to the IEDC’s Innovation Development Districts, tools designed to create incentives for large-scale economic development projects, including the LEAP District in Boone County. Under the amendment, the total investment plan must be at least $750 million before the IEDC can take steps to designate it as an IDD. The local unit of government and the IEDC must reach an agreement before an IDD can be designated—a requirement that now only applies to projects under $2 billion. And the IEDC also would have to notify the Department of Local Government Finance and the Department of Revenue of an IDD designation. All changes are designed to improve communication between government units and increase transparency.
Larger Senate Surplus: While House lawmakers set state reserves just below 12%, the Senate version of the budget creates a larger rainy day fund at more than 13% in both years.

Unsurprisingly, the budget drafts do not include increasing the tobacco tax, which remains a top Indy Chamber priority. But we’ll have more clarity on whether that could be in the cards after the state releases its revenue forecast next Wednesday, April 16. If you want to dive deeper into the budget, you can view the Senate’s budget proposal here.

The Price Is Right

After months of back-and-forth about how to balance property tax relief with local government needs, Gov. Braun and the legislature are closer to having a deal. SB 1, the home to various plans and proposals addressing property taxes and local income taxes, passed the House 65-29 this week. It includes the following key provisions:

Residential Property Tax Relief: Homeowners will receive property tax relief in the form of a $300 tax credit beginning in 2026, with larger credits available for seniors meeting income requirements and disabled veterans.
Public School Property-Tax Sharing: The bill also requires public school corporations to share operating funds with public charter schools, a provision previously in SB 518. Capital fund-sharing is not included. It also requires that referenda be held in general election years so that voters have more transparency about the tax impact of these ballot questions.
Business Personal Property Tax Reductions: The House Ways and Means passed version of the bill would’ve phased out business personal property taxes over a 10-year period, but that provision was removed. Instead, the bill exempts small businesses with up to $2 million in equipment, up from the previous threshold of $80,000 in equipment.
Local Income Taxes: The bill decreases the local income tax rate by reducing the cap from 3.75% to 2.9%.

The legislation will likely be concurred upon by the Senate, but if not, it will have to be adjusted through the conference committee process. A summary of all the provisions in the current version of the bill can be found here.

Money on My Mind

Lawmakers have been hard at work this session to identify infrastructure funds to support roads, bridges, sidewalks, and more—especially as vehicle efficiency and driver patterns put a strain on gas taxes. HB 1461, as we’ve told you previously, would allow for tolling of interstate highways, distribute some state funds based on total lane miles in a win for growing communities, and allocate $50 million for much-needed infrastructure in Marion County if locals can match those dollars.

To compensate for the lack of gas taxes their drivers incur, it also now includes increases to registration fees for electric vehicles (from $150 to $340) and hybrid vehicles (from $50 to $170). We’re encouraged by the progress in the bill and will continue to advocate for provisions including tolling, total lane mile allocations, and the $50 million for Marion County.

Works Hard for the Money

Educating is hard work, and solving for governance, student outcomes, and operations puzzles are only pieces of the large equation—as evidenced by the tumultuous debates at the Statehouse this year. This week, state lawmakers created a mechanism for locals to roll up their sleeves.

This week, the House Education committee adopted an amendment to create the Indianapolis Local Education Alliance (ILEA) as a mechanism to chart a new course for the future of public schooling within the bounds of the IPS district—one that takes steps towards creating fiscal equity between schools and improving education outcomes. SB 373 also creates a statewide pilot program for transportation and facilities management, wherein other communities could opt in to develop similar solutions.

In the latest development, the legislature removed specific organizational appointments to the task force and gave the majority of the board seats to Mayor Joe Hogsett, who will also chair the body. The remaining seats will be appointed by IPS leadership.

The ILEA will have six months—from July to December of 2025—to develop recommendations for management of school facilities and transportation, revenue sharing between charter and district-managed schools, student outcomes accountability structures, and collaborative governance models—all of which might culminate in a plan for a future taxing referendum, very likely in the Fall of 2026. The question will be, can this group successfully develop broadly endorsed solutions for the future of public schooling in the district? In large part, that will depend on who gets appointed to participate in the ILEA.

The Indy Chamber helped develop the concept of the ILEA as a mechanism to take IPS-centered debates out of the Statehouse and put them into the hands of local leaders.

We are glad to see the mayor’s office take a leading role in carrying this conversation forward, and we believe the Indy Chamber’s voice on behalf of the business community will be critical to have represented on this body—particularly to ensure that students in the heart of our capital city are prepared for the jobs of the future. We look forward to partnering with the mayor and local leaders in this effort.

Turning Over a Coin

Changes to a controversial bill around diversity, equity, and inclusion practices this week provided clarity for those seeking to implement it and helped alleviate some critics’ concerns, but fears over the impact the bill could have on free speech and inclusive practices remain. A key amendment offered by Rep. Chris Jeter (R-Fishers), Indiana House Judiciary Chairman, shifted the language in the bill to focus on practices, rather than the existence of DEI offices. “I think it can be difficult to legislate words and acronyms, and so we really tried to home in on the actions we’re trying to address,” Jeter said, noting the desire for codification of the 2023 U.S. Supreme Court decision banning race-conscious admissions.

The bill applies to discrimination in public education, public employment, and licensure, and does not affect private companies. Rep. Earl Harris (D-East Chicago) offered an amendment to clarify that the new provisions would not impact existing scholarships to minority students, such as the Next Generation Hoosier Minority Educators Scholarship Program, and the House adopted that amendment.

The next two weeks are certain to be fast-moving, and a lot can happen between now and April 29. Continue following updates here and via our socials, and check out our bill trackers below: