The 2019 session of the Indiana General Assembly featured important – and spirited – debates about the future of our state and our region: Would we stand up against hate and welcome diverse talent by enacting bias crimes legislation? What priorities would guide the development of the next biennial budget? From early learning and K-12 to higher education and workforce development programs, would legislators make crucial investments in human capital?
Five months later, we know the answers – for now. The theme of our legislative agenda, “Strong Foundations. High Aspirations.,” is a reasonable summary of this session: In many ways, we strengthened our business climate basics. The areas where we fell short give us a roadmap to aim higher and keep working.
GOAL: Ensure children entering primary (K-12) education are academically, socially and emotionally prepared for success through high-quality, publicly-funded Pre-K programs; increased public investments should focus on those in financial need and support statewide access, while protecting funding and service levels in high-demand, high-capacity ‘pilot’ counties. Further, enact mandatory, fully-funded, full-day kindergarten by age 5 to create a consistent, quality early education pathway
OUTCOME: HB1628 passed, expanding ‘On My Way’ pre-K to all Indiana counties while maintaining current funding levels ($22M annually) and protecting service levels in existing pilot counties (like Marion). The bill also expands eligibility for households led by grandparents, sibling guardians or others who may meet income guidelines but not work requirements.
It represents another foundational step towards accessible and affordable quality early learning programs that will pay off for our future workforce and economy.
GOAL: Reinforce and enhance Indiana’s brand as a welcoming and diverse state by:
Enacting “bias crime” penalties for criminal offenses where it can be proven that the victim or target is intentionally selected because of personal characteristics enumerated by law
OUTCOME: SB198 was passed and sent to the Governor’s desk for approval. This action marked the most substantive movement on bias crimes legislation in the last 20 years. We now have a law on the books that hopefully removes us from the dwindling list of states that turn a blind eye to bias crimes.
Regardless of this outcome, bias crimes will remain a top Indy Chamber priority as we continue the push to strengthen this law so no citizens are left behind or denied equal protection. We still have work to do in continuing to build a competitive business climate and protect all Hoosiers at risk of being targeted by bigotry and intolerance, but this legislative action in 2019 was a major step forward.
GOAL: Support a statewide approach that encourages interlocal collaboration, allows catalytic investments in regional priorities, and creates a fiscal framework to fund essential services such as public safety and infrastructure
OUTCOME: The Regional Cities Development Fund was phased out of the budget, with responsibilities transferred to the Business Promotion & Innovation Fund, while SB563 created a new redevelopment tax credit to encourage reinvestment and new urban development.
Other reforms of the local/regional revenue structure will earn the spotlight during interim study committees: SB565 includes a study of ‘regional investment hubs’ allowing localities and regional development authorities to build ‘own source’ revenue capacity to pursue ongoing capital needs and transformative economic development projects. The distribution of local revenues based on residence and employment and potential state-county revenue sharing are also headed for the summer study agenda.
The Indy Chamber will also be engaged in next steps with the Indianapolis MPO and Regional Development Authority (RDA) as they explore a new governance structure.
GOAL: Accelerate community reinvestment and accessible employment opportunities in and around brownfield sites, driving economic development and maximizing property values by:
OUTCOME: The budget (HB1001) increased funding by $1 million per year for the Excess Liability Fund, a fund used to fund brownfield remediation program under the Indiana Finance Authority (IFA) and leverage federal funding. This increased funding marks a modest step in a positive direction. SB563 created a redevelopment tax credit to give state and local economic development officials another tool for attracting investment to chronically-vacant properties, including blighted brownfield sites (which earned some scoring preference for identifying qualified redevelopment sites).
GOAL: Support a comprehensive approach to increase the health, wellbeing and productivity of Indiana’s current and future workforce through supporting policies such as:
OUTCOME: Despite overwhelming constituent support, there was no movement on cigarette taxes, as lawmakers deferred the opportunity to gain $350M in revenue (with a $2-per-pack increase) while building a healthier, more productive workforce, even as the Medicaid budget continues to outgrow projections as one indicator of Indiana’s lagging public health.
GOAL: Continue the momentum of Indianapolis’ convention and sporting industries by expanding current funding mechanisms. Leverage these resources to support expansion of the convention hotel footprint and prioritize existing facility investments. Provide for the sustainable operations of the Indianapolis Capital Improvement Board and support existing franchises, including the development of professional soccer
OUTCOME: SB7 expanded the downtown professional sports development area (PSDA), and extended the life of various Capital Improvement Board revenue streams to enable the continued investment in the decades-long public-private convention and sporting strategy. The bill allows for significant improvements to aging facilities, ensures a long-term lease agreement with the Pacers, and enables the development of Eleven Park and the growth of the world’s most popular sport in Indianapolis.
HB1115 (Tourism Development) also creates a statewide agency similar to Visit Indy to bolster Indiana’s tourism strategy.
GOAL: Maximize the ability of local government units to respond to redevelopment and economic development opportunities through utilization of Tax Increment Financing (TIF) districts
OUTCOME: SB566 creates a new type of residential TIF, a tool for redevelopment commissions to encourage residential housing development (improvements in the bill allow the TIF to be applied equally to meet workforce housing demand in rural and urban areas alike). Various efforts to restrict TIF funding for much-needed workforce development investments were unsuccessful.
GOAL: Increase the Certified Technology Park (CTP) tax capture allowance from the current $5 million cap to allow high performing CTPs to increase public-private investment in the CTP and surrounding areas
OUTCOME: SB563 allows longer renewal periods and flexible funding for Certified Tech Parks and allowed CTPs to capture an additional $100,000 annually to continue investment and operations in high-performing CTPs.
GOAL: Support policies that can improve the State’s capital environment and nurture innovative activity through:
OUTCOME: SB563 establishes small business innovation vouchers to increase access to R&D resources and technical assistance programs offered by state universities or other research institutions. It also updates qualified investments (under the Hoosier Business Investment tax credit) to include digital manufacturing equipment, and also extends the credit to apply against state retail and sales taxes.
The bill also expands the headquarters relocation tax credit so high-potential, venture-backed firms qualify and creates a new redevelopment tax credit, to encourage new investment in underutilized properties.
Along with new tax breaks for large data centers (HB1405) and funding of the 21st Century Research & Technology Fund, the budget provided funding for the Business Promotion & Innovation Fund ($15.5 and $17 million in 2020 and ‘21), to cover key regional projects and new economic development programs like better air service connectivity and development of a forth port on the Ohio River.
GOAL: Support efforts by telecommunications providers to transition their networks from old legacy technology to an advanced all-IP, all-mobile and all-cloud infrastructure
GOAL: Promote regional cooperation and strategic quality of life investments through the IEDC’s Regional Cities Initiative (RCI):
OUTCOME: The Regional Cities Fund was eliminated in the budget, but funding for Regional Cities projects was provided in the Business Promotion & Innovation Fund. The new Redevelopment Tax Credit provides preferential weighting for sites requiring environmental remediation and brownfields over 50 acres designated as a qualified investment.
GOAL: Increase state funding and incentives to encourage redevelopment and investment in aging commercial, industrial and residential properties.
OUTCOME: Allows for nonprofit to qualify for historic preservation and rehabilitation grants if the historic property will be used for the benefit of the organizations purpose. Increases the maximum grant from 35% to 50% qualified expenditures, not to exceed the grant ceiling of $100,000. Qualified expenditures for the history property has been reduced to $5,000 from $10,000.
In addition, HB1405 created a new food hall and alcohol permit, which is an important component of the redevelopment of the historic Coca-Cola bottling plant/IPS bus facility into the new Bottleworks District.
GOAL: Support shovel ready community redevelopment efforts through the creation of a statewide grant program to fund the demolition of blighted commercial properties
OUTCOME: The redevelopment tax credit (SB563) was adapted to provide more flexibility to sites where buildings deemed a threat to health or public safety were proactively demolished (the previous “DINO” credit only applied to facilities of a certain size and age).
GOAL: Support innovative efforts to increase access to healthy food options to improve the health of Indiana resident and workforce
OUTCOME: Various bills were filed addressing food deserts and insecurity, yet little action was taken despite the rising awareness of the impact to urban and rural areas alike. We will continue to advocate for innovative solutions to address this critical issue.
GOAL: Maintain state support to continue operations and enhance service of the Hoosier State Line to better facilitate connectivity and economic opportunity between Indianapolis and Chicago
OUTCOME: $3 million previously allocated to support the daily service of the Hoosier State Line between Indianapolis and Chicago was not included in any version of the new budget. Service between these regions will continue 3 days a week via the Cardinal Line.
GOAL: Support the creation of a statewide loan or grant fund to build out of greenways and bike lanes for local communities
OUTCOME: Another $650 million will continue Governor Holcomb’s ‘Next Level Connections’ fund, which includes local trail grants and other infrastructure initiatives.
GOAL: Restore a dedicated funding stream for the Public Mass Transportation Fund (PMTF) to account for increased participation and demand of transit agencies throughout the state
OUTCOME: Legislators continued funding the Public Mass Transportation Fund at $45 million annually, and reallocated $185M to continue double-tracking upgrades to the South Shore commuter rail line in Northern Indiana (positive precedents if the Central Indiana light rail ban is ever lifted to allow future regional transit planning to evolve unfettered).
GOAL: Capitalize on rapid advances in personal mobility and transportation by making new mobility options safe and accessible for Hoosiers, and positioning Indiana as a center of innovation for mobility solutions:
OUTCOME: HB1362 provides requirements for a peer to peer (P2P) vehicle sharing program. (and pre-empts any local ordinance, resolution, policy, or rule to regulate peer to peer vehicle sharing).
HB1649 (Electric Foot Scooters) addresses one new form of alternate personal mobility; it defines an electric foot scooter as not a motor vehicle for purposes of certain motor vehicle laws, and provides that an electric foot scooter has all rights and duties that apply to a person operating a bicycle.
GOAL: Support the creation of a statewide coordinating body to ensure sustained economic opportunity through responsible management of water resources
OUTCOME: HB1406 creates the water infrastructure assistance fund (with $20M/year in the state budget) to provide local government resources to improve water infrastructure. SB4 further creates a storm water management task force to study issues related to storm water management systems.
GOAL: Require short-term rental platforms to collect and remit local innkeepers’ tax; dedicate these dollars to accelerating, expanding and sustaining community strategies to combat homelessness and panhandling
OUTCOME: The online sales tax provisions formerly in SB322 were moved into the budget, levying innkeeper’s taxes on short-term rentals (and at ‘retail’ rates for online hotel booking sites) and requiring market facilitators like Amazon to collect state sales taxes.
GOAL: Allow local government greater flexibility over their own structural and fiscal matters to address the needs of their individual communities
OUTCOME: Issues of regional cooperation and investment, local tax equity and state-local (county) revenue-sharing are on the interim study committee agenda.
GOAL: Require township funds that exceed 150% of operating expenses to be spent on infrastructure projects within the township or credited to the taxpayer
OUTCOME: HB1177 required townships to prepare a three-year capital improvement plan that outlines a three year budget, cannot collect more property taxes without a balanced budget and capital plan.
GOAL: Build off of the recent work to better align state secondary education, workforce and economic development strategies that promote transferability, stackability, and permeability of credit awarding curricula. Also, we support state-based incentives to encourage businesses to employ students in an apprentice or intern capacity and provide on the job training with the final goal of permanently hiring those who have excelled
OUTCOME: The budget and policy changes in HB1002 doubles Next Level and Worforce-Ready grants for industry-driven training and creates non-profit Industry Credentialing Organizations to pursue financial and programmatic support to create credit, certificate and technical education opportunities for students
GOAL: Increase employment opportunities for returning veterans by eliminating duplicative requirements and expedite processes for military-trained personnel to obtain the equivalent civilian license, as well as support ongoing efforts to recruit military personnel to the state to meet the workforce needs of regional employers
OUTCOME: HB1010 made income from military pensions exempt from state income taxes. SB491 provided funding for specialized treatment for traumatic brain injuries and eliminated co-pay requirement for related diagnostic testing.
GOAL: Support policies that promote reintegrating ex-offenders into the workforce and economy:
OUTCOME: HB1141 allows people to regain driving privileges with a traffic amnesty program, reducing fees and penalties by 50%.
GOAL: Support licensing reciprocity between states to fill critical nursing shortages
OUTCOME: HB1344 allows for cross-state nurse licensure reciprocity with a $25 annual fee.
GOAL: Support the Indiana Commission for Higher Education’s Return and Complete efforts to reengage Hoosiers with some college credit but no degree
OUTCOME: HB1001 doubles Workforce Ready and Next Level Employer grants to help adult Hoosiers upgrade their skills to match the demands of the job market;
GOAL: Enhance outreach and wraparound services and evaluate sustainable funding mechanisms for programs, such as the 21st Century Scholars program, in order to increase access to and completion rates at two- and four-year colleges and universities for those with financial need
OUTCOME: This program was fully funded.
GOAL: Accelerate the appointment powers of the Governor to 2021
OUTCOME: HB1005 moved up the activation date to January 2021 (previous years legislation included an activation date of 2025)
GOAL: Support dedicated funding and policies to deploy high-quality classroom science, technology, engineering and math (STEM) curricula and STEM-focused professional development for the educators. Specifically, emphasize access to computer science and engineering courses at the high school level to prepare graduates for college and career opportunities in high-demand STEM fields.
OUTCOME: To prepare students for higher-paying jobs, the budget also included funds for STEM programs, computer science teacher training and Industry Credentialing Organizations to support career and technical education partnerships.
Also, provide school districts flexibility to pay teachers based on high need and specialized subject matter areas. Empower local education officials to make administrative and structural decisions affecting individual school performance, including the option to extend school hours, merit pay options, providing voluntary alternative retirement benefits options such as defined contribution plans for new teachers
OUTCOME: While the legislature largely left salary decisions to local districts, the budget did include $75 million for Teacher Appreciation Grants targeted specifically to bonuses and base pay for highly-effective teachers; budget provides teacher grants and teacher pay structure
GOAL: Expand the authority of the Mayor of Indianapolis to charter Pre-K educational institutions and require local public hearings for the re-chartering of schools attempting to switch charter authorizers after a charter has been revoked
OUTCOME: HB1641 gives school districts like IPS more flexibility on facility reuse by shortening the window for charters to pursue vacant school properties from 2 years (old law) to now 90 days under the state’s $1 law. The bill requires charters pursuing facilities over 200,000 square feet to demonstrate projected enrollment will be sufficient to utilize 60% of the facility’s capacity of the maximum student enrollment in the last 25 years of operation.
GOAL: Support efforts to increase teacher pay from the state to local school districts.
OUTCOME: The budget included $763 million in increased K-12 funding including $539 million in added tuition support (a 2.5% increase annually, just above inflation) and $150 million for advance payments to teacher pensions. The budget also included $75 million for Teacher Appreciation Grants targeted specifically to bonuses and base pay for highly-effective teachers.
Operational Efficiencies – HB1003 set school corporation efficiency targets and new financial reporting requirements aimed at minimizing administrative overhead and driving more dollars to the classroom.
Charter Funding – The budget provided $750 per-student support (a two-year total of $45 million in the Charter Innovation Grant Fund) and 85% of tuition support for virtual programs (down from the 90% status quo).
Complexity Funding – An early version of the budget all but flatlined complexity support, a move which would have been a hard hit to urban districts (like IPS) and rural schools alike, since both serve high numbers of students in poverty. The budget eventually found a middle ground on the complexity funding level ($3,650 for ’20, $3,675 in ’21) and urged an interim study committee on the most accurate way to count students in poverty.