To paraphrase Migos, rain drop, drop top, it’s about time this session stopped. The General Assembly met on Thursday to pass the budget (HB1001) and a few final bills before wrapping up, at least for now (lawmakers still need to reconvene in the fall to tackle redistricting). We’ll follow suit and focus on the big news from this week (and a few other key points) before coming back next week with a more comprehensive look at how all the pieces of our legislative agenda fared.
Sometimes stopping bad bills is even more important than pushing good ones, and we definitely played a lot of defense this session.
Our coalition rallied to stop two significant threats to improved transit service in Marion County. SB141 died in committee a few weeks ago, sparing IndyGo from a retroactive rule change that would have imposed unreasonable levels of private fundraising to support public infrastructure around rapid transit.
The next attempt to sabotage IndyGo’s budget came in a last-ditch amendment to HB1191, a bill covering a number of utility issues. The change would have forced IndyGo to pay for utility relocations around rapid transit, past (the Red Line) and future (the Blue and Purple Lines). There was an effort to find a fair compromise during conference committee, but anti-transit legislators refused to budge from the most punitive position – and so even though the session isn’t officially sine die, the bill is sine dead.
Money doesn’t grow on trees, but the state does seem to be raking in the cash in pretty remarkable amounts: The passage of the American Recovery Plan in March sent billions of federal dollars to Indiana, and last week’s revised revenue forecast added another two billion dollars in tax collections over 2022-2023 to earlier predictions.
With the new revenue projections and influx of federal cash, the budget deal announced Tuesday afternoon was a blockbuster that earned praise from both sides of the aisle, eventually passing the House 96-2 and the Senate 46-3.
Nearly $19 billion of the $37.4 billion spent over two years goes to K-12, which gets a $1.9 billion increase using 2021 as the baseline. Looking closer at how those education dollars get divided:
- The House and Senate met in the middle on the school choice plans originally in HB1005: A larger expansion of school choice scholarships made it back into the budget, while Education Savings Accounts stayed limited to a pilot program for students eligible for special education services;
- Complexity aid to students in poverty got a $100 per student bump (from $3,675 to $3,775) – roughly splitting the difference between the House and Senate again – while larger increases to special education and English Language Learner (ELL) made the final plan;
- To focus in on IPS: Indiana’s largest school district gets more than a 4% increase in total funding per student in both years of the budget – much better than the House starting point (0.5% in 2022 and 1.2% in 2023), and closer to statewide average because of a more favorable formula on complexity, special ed and ELL.
To help address teacher pay challenges, the budget also directs school districts to use at least 45% of their state tuition support (per-student funding) for teacher compensation – IPS hovers around this ratio, but this raises the stakes even more for supporting efficiency measures that push more money to the classroom.
The budget also makes significant investments in economic development (mostly paid for from federal funds), including:
- $500 million in the Regional Economic Acceleration and Development Initiative (READI) – up from $150 million – to support regional planning and projects to spur population and economic growth;
- READI seems to be very similar to the 2016 Regional Cities Initiative, and we’re optimistic that Central Indiana’s current economic planning effort (led by our Metropolitan Planning Organization, building on the Chamber’s work on ‘Accelerate Indy’) gives us a head-start on this opportunity;
- $60 million (again, using federal stimulus) to the Hoosier Hospitality Small Business Restart Grant Program to help small Hoosier businesses get back on their feet (HB1004);
- $75 million to jump-start a Career Accelerator Fund to incentivize short-term education and training programs that lead to high-wage, high-demand jobs (sort of a fast-track version of the existing Next Level Jobs program – also fully-funded in the budget – focused on 1-2 year degrees and certificates);
- The budget also puts $10 million per year into Manufacturing Readiness Grants and increases the 21st Century Research and Technology fund annual appropriation to $32.75 million (splitting the difference between the House and Senate).
On public health, Medicaid is fully-funded (of course), and the final budget also restores full mental health funding and adds another $100 million for mental health initiatives – a big breakthrough that we wholeheartedly support.
The final budget continues to set aside $50 million for the public health challenges grant program created by HB1007, which got a House concurrence vote last week and was sent to the Governor Wednesday. On that note, acknowledging the broad overlap between the budget and the rest of our agenda, let’s hit a few more highlights from our priority issues:
Staying with public health and the budget, the good news on state revenues and federal stimulus was bad news for a cigarette tax increase. However, the budget does include a 15-25% tax on e-cigarette products, a significant step on youth tobacco use.
Our primary interest in raising tobacco taxes has never really been about the revenues, but rather the urgency of lowering Indiana’s high smoking rate to build a healthier workforce and more productive economy. So as we’ve noted before, the 50-cent-per-pack increase in the House budget was a mixed blessing. We’ll be back pushing for a more meaningful increase of $2-per-pack.
- We’ll also be back pushing for substantive action on pregnant worker accommodations: HB1309 is a largely meaningless bill that will become a mostly irrelevant law, simply allowing pregnant workers to request accommodations without reprisal;
- We also have plenty of work left to do on closing racial health disparities and attacking issues like food deserts – but once signed by the Governor, HB1283 will create “urban agriculture zones” to incentivize farming in urbanized areas to expand access to healthy food as a small step forward;
- Crossing health and education, HB1405 passed conference committee at the wire – it allows school corporations to get Medicaid reimbursements for certain mandated health services, easing budget pressures while promoting healthier students.
- HB1002, strengthening COVID liability protections for healthcare and higher education institutions, was signed by the Governor – joining SB1 extending liability protections to businesses that are safely re-opening (passed and signed earlier in the session);
- Part of a safe re-opening and return to work is addressing public safety along with public health challenges: SB218 got final sign-off in the Senate and was signed by the Governor this week – dealing with township poor relief, the bill includes penalties for aggressive harassment and trespassing, addressing a shared concern of downtown dwellers, visitors, workers and employers;
- It’s notable that SB218 also includes a state-local study committee focused on low-barrier homeless shelter capacity and community-based programs for the homeless in Marion County;
- In addition to other economic investments in the budget, HB1001 increases the annual cap on the Venture Capital Investment (VCI) tax credit to $20 million starting in 2022 – a positive step for our innovation-driven economy;
- In helping our workforce rebound from COVID, enough legislators didn’t share our interest in workshare programs to minimize employment disruptions – but we did get a well-funded workforce development system with programs like Next Level Jobs and the new Career Accelerator initiative, and higher education funding restored to pre-COVID footing in 2022 and increased 2% in 2023.
Smart Justice Reforms:
To come full circle, justice reform is certainly an area where we mixed progress and playing defense:
- On the plus side, HB1006 sailed to the Governor’s desk early in session without a single vote against it: The bipartisan police reform bill included provisions on chokeholds and body cameras, enhanced law enforcement training and procedures to decertify officers guilty of misconduct;
- The budget backed up HB1006 with increased funding for law enforcement training and grants for local police departments to purchase body cameras;
- Several counterproductive proposals were put behind bars…most notably, SB168 would have put IMPD under a state-dominated oversight board; it was slimmed down to a summer study committee on IMPD governance and never even made it out of the Senate;
- SB394 was defeated outright in committee, saving local efforts to strengthen civilian oversight of police to rebuild trust and cooperation between law enforcement and the communities they serve;
- Like public health, criminal justice reform is a mammoth task – we would have liked to see more wins on issues like sentencing; HB1202 would have provided flexibility adjusting tougher mandatory minimum sentences enacted in the past, but was deadlocked in conference committee.