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Last Wednesday, the State Budget Committee got an updated revenue forecast from its team of economists and fiscal analysts, a new outlook for the next two years as the session enters its final week.  Would the revision deliver a windfall to budget negotiations between the House and Senate, or demand significant conference committee cutbacks?

Like much of the budget wrangling this session, the answer avoided major drama.  Anticipated revenues were down just $32 million; adding a higher Medicaid projection meant the conferees on HB1001 face a $100 million two-year gap – a blip in a $34.6 billion total. 

To paraphrase Biggie Smalls, the budget showdown is a case of ‘less money, more problems’ as there are still plenty of issues to work out beyond finding another $100 million:

  • The final of K-12 total, and the mix of (per-student) tuition support, Teacher Appreciation Grants, charter and choice funding levels, and how complexity (aid to higher-poverty school districts) is factored in;
  • Whether the budget will fund the DCS funding request in a straightforward way or encourage the Governor to tap into gas tax revenues (needed for sustained state and local infrastructure investment, as we lobbied for in 2017);
  • Settling on appropriations for a number of important economic development programs, like the 21st Century Fund and Business Promotion and Innovation Fund;
  • How much to leave in the state’s rainy day funds, as recession fears grow (and legislators craft the first budget since voters approved a constitutional balanced budget requirement last year);
  • And more…as a conference committee hearing on HB1001 is in progress as this is written (hearing testimony on retired teacher benefits and other K-12 issues), we’ll have much more to report.

Tapped Out on Tobacco:
We shouldn’t miss the chance to remind you that the General Assembly passed on more than $350 million in new annual revenue by dismissing a $2-per-pack increase in the state cigarette tax.  The proceeds could have made critical investments in public health; to put it in perspective, it would have also been enough to fund the DCS request without gas tax diversions or roughly double the annual K-12 tuition support increase proposed by the Senate.

(HB1444 – a study committee on taxing vaping products – passed the Senate but heads to conference committee, so there’s still a slight chance of making a relevant amendment on tobacco taxes.  But it’s more likely that lawmakers are “holding back” on cigarette taxes in case of a Medicaid budget meltdown.)

Stranded on Death Row:
It’s that time of the session when a few bills that seemed to be on solid footing fall victim to committee deadlines or behind-the-scenes drama.  Some notable casualties this week include:

  • SB420 (Workforce Development) – died as a standalone measure but added to HB1002 (the Senate has already added $1.5M for industry credentialing organizations into the budget in anticipation);
  • SB532 (Teacher Licensing Examination);
  • HB1404 (School Accountability) – perished amid disagreement on post-graduation metrics for school performance.

Winning at the Wire:
On the other hand, bills that kept chugging forward (or reached the finish line) as we enter the home stretch:

  • SB552 (Gaming Matters) passed the House; now a conference committee will hash out the sprawling plan consolidate Gary riverboat licenses, create a competitive process for a newly-created casino license in Terre Haute and allow sports wagering across the state;
  • SB566 (Residential Tax Increment Financing) passed the House but heads to conference after the Senate dissented on the scope of TIF tools to encourage workforce housing development;
  • HB1518 (Alcoholic Beverage Matters) passed the Senate and returns to the House, creating ‘food hall’-style alcohol permits, helping the development of mixed-use projects like the Bottleworks;  
  • HB1641 (Charter School Matters) reduces the time frame that a school corporation must make a vacant or unused school building available to a charter school and establishes new minimum bid requirements;  after passing the Senate, a House motion to concur was filed today;
  • HB1002 has steadily expanded to encompass a variety of career and technical education programs and industry engagement initiatives for workforce development (including the substance of SB420) and is being discussed further in conference committee;
  • SB7 (Capital Improvement Board) was amended and passed third reading last week, on the eve of a successful deal between the Pacers and the CIB – but with a filed dissent, hoops fans, hotel owners and soccer hooligans will all have to await the results of conference committee;
  • SB472 got the most attention for a provision that was stripped (a moratorium on new energy generation plants) – it’s in conference committee to refine a proposed 21st Century Energy Policy Task Force;
  • On Tax Day (ironically), the Senate dissented from House amendments to SB332, dealing with collection of online sales taxes from hotel booking sites and third-party facilitators like Amazon, setting up a conference committee;
  • A conference committee is also hearing SB563 (Economic Development) – we’re weighing in on behalf of a more flexible redevelopment tax credit, not tied to regional development authority planning and additional credit potential for brownfield properties;
  • We’re also keeping an eye on SB565, which now includes regional “investment hub” language – as expected, the Senate dissented from these significant changes and a conference will debate the concept of interlocal collaboration to finance regional capital priorities;
  • HB1177 (Township Government) requires townships to adopt a capital improvement plan for persistent surpluses and addresses fund transfers for smaller townships – in a rare win for government reform, the House concurred this week;
  • HB1344 (Nurse Licensure Compact) – after sitting on an amended Senate version for a week, the House concurred to allow Indiana to participate in a multistate nurse licensure reciprocity compact;
  • HB1141 (Traffic Amnesty Program) aims to ease driving suspension fees to help lower-income Hoosiers get to and from work – its conference committee report halves the license reinstatement fee, but reduces the program to one year and continues to assess administration and court fees (though with a payment plan).

 This is just a partial list of committees and concurrences in progress, with just over a week to go before the adjournment deadline.  We’ll be sorting through developments and keeping you updated. 

And for even more up-to-the-minute news on #INLegis, follow the Business Advocacy team on Twitter:

Mark Fisher – @FisherIndy
Tim Brown – @TimJBrownLaw
Taylor Hughes – @STaylorHughes