Next week, Hoosier lawmakers convene at the Statehouse for Organization Day, the ceremonial kick-off for the 2022 General Assembly…if you’re thinking it seems way too soon to contemplate another legislative session, we feel you: The 2021 session formally ended just a few weeks ago, since delayed Census data postponed the decennial redistricting process until the fall.
This was also a budget year, so legislators didn’t get much of a breather after passing a two-year, $37.4 billion state spending plan, especially after so many fundamental assumptions were scrambled by an unprecedented influx of federal aid and a tremendous surge of state revenue down the homestretch.
So, things should finally settle down next year…right?
How about no?
As a matter of fact, we expect 2022 to mark another hectic session, and we’re preparing an aggressive pro-business agenda to match.
The non-budget “short” session typically sticks to issues without a significant fiscal impact, but there are three billion reasons why next year could be different: Indiana’s budget surplus remains at historic levels even after dividing a billion dollars of rainy day reserves between automatic tax refunds and public pensions.
This means pressure to reduce taxes or revisit spending as state revenues continue to beat forecasts month after month. We’re waiting to evaluate specific proposals based on our existing priorities – e.g. incentivizing urban redevelopment and high-tech economic investment, addressing housing affordability and access near employment centers (like Indianapolis), and investing in a healthy, job-ready workforce among others.
On the topic of tax reform, there’s been talk about cutting or even eliminating the business personal property tax on equipment. We’re all for encouraging new investment but are proceeding with caution: Taking away part of the property tax base also shifts the burden to homeowners and employers in less capital-intensive industries and limits local revenue – we need to understand the trade-offs.
Back to school:
Changes to property tax levies will affect school referendum revenues for districts like Indianapolis Public Schools, for example. IPS recently proposed splitting the proceeds from its 2018 referendum with its innovation school partners – a move we support to raise teacher pay across the district while providing diverse learning experiences for the district’s diverse student population.
Closing achievement gaps for students who face challenges beyond the classroom is a top priority for IPS, and should be for all of us: Educational attainment breaks down barriers to employment, upward mobility and full inclusion in the knowledge-driven economy. The Indy Chamber supports more state aid for students living in poverty; revisiting the school funding formula in the middle of a budget cycle isn’t practical, but there are other ways to promote educational equity that may end up on our agenda:
• Exploring ways to increase college enrollment, starting by requiring every Hoosier high school student to complete the FAFSA to understand the financial resources available for post-secondary education.
• Attacking the challenge of disengagement among lower-income and students of color in the 21st Century Scholars program, getting more local families moving along this pathway to college.
• Identifying solutions to the persistent digital divide that has been further exposed by remote learning through the pandemic, recognizing that broadband access and affordability spans the rural-urban divide (and financial resources should be allocated accordingly).
The list could (and will) go on; a well-educated workforce is routinely ranked as a top concern by growing employers, and we can’t afford to take our eye off the ball. That’s why we’re increasingly worried about the toxic politicization of public education, and the consequences for our competitiveness.
Pupils > Politics:
Making school board elections partisan would be counterproductive to keeping our focus on classroom success. Putting political labels on school board candidates would be a step in the wrong direction, towards undoing the hard-fought progress made in IPS to forge innovative partnerships between traditional and charter schools. We need less polarization in education, not more.
We’re already seeing national political controversies impacting local school board deliberations and are also concerned about the General Assembly wading into efforts by school systems to support all students through diversity, equity and inclusion programs.
It would be too easy to misapply lessons from Virginia elections to Indiana—supporting parental choice doesn’t mean injecting politics into education. The Indy Chamber supports parental options, and statewide restrictions on DEI only take choices away from parents. Education policy shouldn’t be shaped by campaign strategy or the angriest voices at school board meetings.
When it comes to DEI, we’re inclined to listen to the educators who know best: Students are motivated to succeed when they’re treated with respect and see themselves reflected in their scholastic lessons. An understanding of accurate history and diverse viewpoints prepares Hoosier students for a global economy, wherever their lives and careers take them.
You’ll see our commitment to economic inclusion reflected in our final legislative agenda and our work in this arena through the Business Equity for Indy partnership.
Help wanted (protecting employees):
We’re also hearing that healthcare costs and transparency will once again be key issues in the next session of the General Assembly. Public health will continue to be a top priority in our legislative agenda, too, and you’ll see some familiar issues when we release the final draft:
• With the labor market tight and too many local families struggling to keep up with rising consumer prices, we want to encourage expectant mothers to safely stay on the job with common-sense, substantive guidelines on workplace accommodations for pregnant employees.
• Indiana’s high smoking rates continue to drive workforce productivity down and healthcare costs up; the state doesn’t need the revenue, but we do need the deterrent of a higher cigarette tax.
As Indiana recovers from the worst of the COVID crisis, employers are tasked with protecting the health and safety of workers and customers alike. Following both the science and the sentiment of our members, we believe well-vaccinated workplaces save lives, strengthen the job market and sustain our economic momentum (while limiting healthcare costs).
There’s been some pushback on the federal vaccine mandate, but we hope the legislature doesn’t overreact with an anti-business ban on employer-driven vaccine requirements. The Indy Chamber believes businesses should set terms of employment and customer conduct, including COVID vaccination status.
Shop local, think regional:
Higher vaccination rates also drive consumer confidence, something to think about with holiday shopping season right around the corner (yikes). Speaking of which, sales tax revenue has been a major catalyst for Indiana’s revenue rebound…but at the local level, the tax base is stable but still limited by state-level policies like property tax caps and income tax rate limits.
Federal aid will ease some of the budget pressures for the next 2-3 years, but the Indy Chamber continues to champion revenue flexibility and local government reforms that help cities like Indianapolis ‘work smarter’ with available funds – for example, tapping into unspent township surpluses for local infrastructure priorities and encouraging efficiency through government consolidation.
Before the 2022 session, we’ll also know how READI grants were awarded to enhance regional quality of life and community vitality across the state. This is another area that needs longer-term thinking, to strengthen regional development authorities and other models of intergovernmental cooperation to keep progress from stalling after READI funds are committed and spent.
Raising our sights (by lowering our highways)
We wanted to acknowledge the passage of a massive federal infrastructure package with a plug to a transformational opportunity to invest in modern infrastructure and a stronger economy here at home. It’s time to plan the reconstruction of I-65 and I-70 Inner Loop to and through downtown Indianapolis, and we have a choice: Rebuild the status quo, or explore a new vision for this once-in-a-generation project.
According to a study commissioned by the Indy Chamber, rebuilding the elevated sections of the Inner Loop below grade – a recessed system – meets traffic and safety requirements while reconnecting neighborhoods and attracting new investment downtown, to the anchor of our regional economy.
A recessed Inner Loop has the same number of travel lanes with a smaller footprint, allowing city streets to be rebuilt over the interstates for a more convenient downtown traffic grid. Nearby homes and businesses escape the traffic noise and exhaust from highways looming overhead, and connector streets can be reimagined as pedestrian- and cyclist-friendly boulevards that appeal to new development. The Inner Loop was originally built to help people get downtown; this plan will have them coming back and staying longer by enhancing livability and access to our cultural, sports and hospitality assets.
We’ll offer more details next week on this pro-growth alternative for rebuilding the Inner Loop, replacing the elevated system that divided the urban core and drove a wave of depopulation and disinvestment across Center Township since the 1970s that only began to reverse itself in the last decade or so.
Highways aren’t the only construction plans on our minds. We’ve built out our final legislative agenda with the input of Indy Chamber members through our policy councils and will be ready share the specifics with you next month. Keep your eye out for a comprehensive set of priorities to move the Indy region forward.