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The Long Goodbye

We said ‘sine bye’ to the 2022 session of the Indiana General Assembly last week, but we can’t close the curtains on legislative business quite yet. Bills have slowly migrated from the second floor of the statehouse to the Governor’s desk, starting the countdown for executive action.

The last batch of bills didn’t officially reach the executive suite until Tuesday, giving Governor Holcomb until March 22nd to sign, veto, or allow the measures to become law without his endorsement.

We expect the Governor to stretch the schedule on controversial issues like barring trans girls from participating in school sports (HB1041) and the elimination of Indiana’s gun licensing system (HB1296). Holcomb has only vetoed one bill, HB1211, which limited certain emergency orders (requiring an anticipatory opinion from the Attorney General on their legality) and added regulations to broadband deployment programs funded through READI grants (not the only potential complication with READI, as we’ll cover below).

Signed, sealed, delivered:

Beyond last week’s updates, here are the highlights on bills that have been inked into the Indiana Code over the last few days:

  • Holcomb formally signed HB1002 reducing Indiana’s individual income tax rate from 3.23% to 2.9% over seven years while eliminating utility receipts and sales taxes.
  • He also approved SB361, giving the IEDC new powers to create Innovation Development Districts (after negotiating buy-in from local officials) with state-local tax increment authority, to leverage a new $300 million deal-closing fund and new film production incentives, among other revamped business attraction tools.
  • Just as we were hitting “send” on last week’s update, the ink was drying on HB1359, a Chamber priority aimed at data-driven juvenile justice reform, emphasizing education, emotional support and re-entry programming (making the case for the next budget cycle).
  • Two pro-housing measures also earned signatures: HB1306 creates a statewide housing taskforce and SB382 includes new tax credits for affordable residential development. (We’re waiting for word on HB1214, which improves housing access and stability by ensuring certain eviction records can be expunged instead of unfairly following the renter.)
  • SB7, creating the Marion County crime reduction pilot project and coordinating committee, and SB9 (improving electronic monitoring standards) are safely in the books.
  • HB1193, organizing Indiana’s early learning efforts, passed muster with the Governor.
  • Two public health measures dealing with Medicaid rules also earned final approval: SB284 adjusts rules to promote the use of telehealth, and HB1140 extends Medicaid coverage to services supporting new mothers at least 60 days beyond their delivery date.
  • HB1221 shifts Indiana into a higher gear when it comes to electric vehicle adoption; it allows utilities to seek regulatory approval for rate-funded pilot projects expanding charging infrastructure and public-use vehicle programs.
  • Another eco-friendly bill that got a gubernatorial thumbs-up is HB1226: It creates a $4 million solid waste recycling grant program within Marion County; we appreciate the state-level commitment to reducing the environmental footprint of Indiana’s most populous city and employment center.
  • SB62 allows properties unsold to private entities at tax sales to then be offered for sale to eligible non-profits; we support allowing otherwise unwanted parcels to be put to productive use, though we’re mindful that taking properties out of the tax base also has long-term implications for Marion County’s finances.

We’ll report back on the remaining bills awaiting action from Governor Holcomb. But we’ll urge the Governor again: Listen to the voices of educators, pediatricians and child development experts, human rights advocates and parents of kids who just want to play—veto HB1041.

Indianapolis will host the Final Four again in 2026. There’s still time to protect our reputation as a welcoming state that embraces diversity and applauds all competitors.

Thank you, next:

As March Madness gets underway, tournament-savvy teams know—there’s not much time to savor a win before focusing on the next round.

Indy’s business community can celebrate a number of victories this year. It’s worth another recap:

  • A pro-business blueprint for ending the COVID emergency and protecting employers, workplaces and workers with common-sense rules on vaccine requirements (HB1001).
  • Defending school boards from political takeover and teachers from ideological crusades against “CRT” straw men—defending inclusive classrooms today to foster a more diverse, prepared workforce tomorrow.
  • Making modest progress on crime-reduction strategies in Marion County and juvenile justice reform focused on successful transitions back to school, the job market and community to ensure that youthful mistakes don’t carry a lifelong impact.
  • Advocating upgrades to Indiana’s incentive and investment toolkit (SB361) while staying focused on the broader definition of economic development that includes quality of life, housing, education and workforce development, transit and other public assets that attract and retain talent.
  • Balancing a reasonable tax climate with local revenue capacity to invest in the priorities mentioned above (and pushing the state to step up through programs like READI), working to build consensus on reforms to close the

But there’s more work to be done on all of our priorities, and it’s time to prepare for the next round—here are a few areas we’re focused on:

Getting ready for the main event:

Next year’s state budget session is make-or-break for many of the issues we pushed this year: For example, SB245 created a statewide sports and convention bid fund to go after major sports, convention and hospitality events, but actual appropriations will be made through the budget process. And without sufficient funding, the best-organized early learning programs will fall short of the statewide need to prepare all kids to succeed in the crucial early grades.

And while HB1002 gradually phases in income tax reductions, the revenue impact is still nearly a billion dollars over the next two-year budget cycle (which will also be crafted without the benefit of $3 billion from the American Rescue Plan Act hitting the state’s coffers).

That means more pressure and higher stakes for spending across the board, especially pre-K and K-12 funding. Specifically, the details of the school funding formula and levels of state aid for students in poverty (the ‘complexity index’) that makes a tremendous difference for districts like IPS and Wayne Township.

We’re also looking forward to the findings of the Governor’s Public Health Commission as well as the newly-created Housing Task Force, and anticipate a fiscal impact from their recommendations that will need to be factored into budget negotiations. And while the federal infrastructure bill will pay off for Indiana, state and local investments need to keep up with basic needs as well. And speaking of…

Construction zone:

Beyond the predictable snark that comes with pothole season, serious infrastructure issues are on tap this summer. The City of Indianapolis just released an analysis of the billion-dollar annual gap in road construction and maintenance budgets. Again, part of the solution lies at the statehouse and the need to tweak the local road funding formula to reflect traffic patterns and the physical reality of wider thoroughfares (using lane miles versus road miles to calculate needs).

We’re also continuing the conversation on long-range plans for the reconstruction of the I-65/70 Inner Loop beyond the current North Split project. Along with the Rethink Coalition, we’ve released an analysis of a recessed interstate alternative (rebuilding today’s elevated sections below grade) to enhance quality of life, economic development potential, and equitable redevelopment in neighborhoods impacted by the construction of the original Inner Loop.

Another developing story that could affect some capital plans across our region (and the state) is uncertainty around the eligibility of certain projects for READI grant funding. The final rules governing federal ARPA funds (appropriated for READI to be administered by the IEDC) may exclude construction that doesn’t specifically benefit disadvantaged communities, address broadband and water infrastructure, public health or other areas detailed specified in the fine print issued by the U.S. Treasury.

BAC in business:

With primary elections right around the corner, the Chamber’s Business Advocacy Committee (BAC) is also hard at work interviewing candidates and evaluating the campaign landscape here in Central Indiana and key races in other parts of the state. The BAC supports our incumbent allies in the statehouse (and local offices) alongside promising candidates running on a pro-business, pro-growth platform.

Ahead of the May 3rd primaries, we’re endorsing a number of incumbent lawmakers who have stood with us on important issues and now face competitive primaries. More than anything, we value constructive dialogue with our representatives focused on consensus-building and practical policy solutions. Too often, primary challenges fixate on ideological litmus tests and promote polarization and partisanship—we don’t need more of that in the General Assembly.

The BAC rallies members, raises money and amplifies our message to make a difference. Please consider contributing (if you don’t already!) to help advance the advocacy agenda you read about every Friday—learn more here.

 

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