This week, lawmakers dropped new beats on current bills, remixing the Statehouse soundtrack as the last few weeks of session loom ahead.  There were major changes to the gaming bill, the Capital Improvement Board (CIB) revenue plan and economic development policy.  If that wasn’t enough, the Senate released its version of the budget Thursday morning. 

To quote the Beatnuts, “Watch out now!”  With heavy committee action and more bills getting shuffled to the floor and the Governor’s desk, if you blinked you might miss something.  Here’s our take.

New School

We like our old school hip-hop references here, but this session definitely has a “new school” spin: Top fiscal leaders like Todd Huston and Ryan Mishler are guiding their first budgets, and school funding – as usual – is a top issue. 

In fact, each iteration of HB1001 has upped the ante on state tuition support: The Senate amendment nudges the numbers a little higher, for a 4.9% biennial bump for K-12 funding (versus 4.3% from the House and 4% originally proposed by the Governor).  Taking a closer look:

• Like Governor Holcomb and the House, the Senate GOP shied away from requiring that additional funding go to teacher pay; they did add to Teacher Appreciation Grants (now at a $90M two-year total) which are targeted to bonuses and base salaries;
• The Senate took a tougher position on charters (especially virtual programs), cutting per-student support from $1,000 (House passed) to $500;
• As Senator Mishler hinted last week, the Senate eases cuts in ‘complexity funding’ for high-poverty school districts (and added English Language Learner funds) to support challenged urban and rural communities;
• There was little change in workforce priorities (doubling Workforce Ready and Next Level Employer grants), though the Senate did add $1.5M for Industry Credentialing Organizations to align with SB420 (supporting career-focused credential programs, which was engrossed on second reading);
• On economic development, there was general alignment, though the Senate did trim funding for the Business Promotion & Innovation Fund (back to the Governor’s original $15M/year request) and cut the 21^st Century Fund by about $8M a year.

A lot depends on next week’s updated revenue forecast and how funding matches up with the final version of SB563 (economic development), but we’d certainly prefer more investment in entrepreneurship and innovation initiatives.

The Senate-remixed HB1001 passed the Appropriations Committee, and after new revenue data is presented by the State Budget Agency next week, we’ll have a good idea of the positions and parameters that will shape the fiscal negotiations to come.

The CIB Scoreboard

On Monday, the Ways & Means Committee made significant changes to SB7, the Capital Improvement Board funding bill, which then passed third reading on Thursday. 

The amended legislation removes a proposed Hilton development at Pan-Am Plaza from the PSDA, including other downtown hotels to provide longer-term funding (on a sliding scale) for a convention center expansion and upgrades to Bankers Life Fieldhouse and other facilities.

As hoteliers debate downtown room capacity adjacent to the Convention Center and the Pacers deal looks to be a slam dunk at today’s CIB meeting, the Indy Eleven franchise has quietly dribbled towards their goal: Funding potential for a new $150M soccer stadium stayed in the bill, minus a requirement that the team join the MLS by a predetermined date.

Wanna bet?

Ways & Means also dealt a new hand to casino operators by amending SB533 earlier in the week.  They halved (from $100 to $50M) a fee imposed by their Policy Committee colleagues for Spectacle Entertainment to consolidate Gary riverboat licenses into a major inland casino.  They also revived a competitive process for a newly-created casino license in Terre Haute (which had been earmarked for Spectacle) and provides ‘hold harmless’ funding for the French Lick/West Baden hotels as the competitive landscape shifts.

The bill also legalizes (and taxes at 9.5%) sports wagering at casinos and satellite locations (amid a continued debate over mobile betting), potentially boosting the gaming revenue stream (now a fairly modest contributor to the general fund).

The rest of the week: Economic development, school efficiency and more…

SB563 was also marked up in committee and passed third reading this week, updating economic development incentives to support high-tech growth and creating a redevelopment tax credit to bring new investment to vacant or environmentally-compromised properties.  The amended bill tweaks the certified tech park statute and specified public health as a factor in choosing qualified redevelopment sites.

Here’s a roundup of what else got remixed, rebooted or read forward in the process:

• HB1003 was finally called – and passed – third reading; the bill creates efficiency ratios for school corporations, now requiring improvement plans from districts that don’t devote 85% of its state funding to instructional expenses (like teacher compensation);
• HB1641 passed the Education Committee on Wednesday – it limits lease window under the ‘$1’ charter facility law but keeps existing public debt with the public school corporation, potentially complicating IPS efforts to maximize the market value of unused properties like the former Broad Ripple High School;
• HB1008 (Teacher Career Ladders) passed third reading;
• HB1628, expanding the ‘On My Way Pre-K’ program statewide, was engrossed on second reading with minor floor amendments;
• HB1114, amended to deal with juvenile criminal sentencing, passed third reading and goes back to the House, where the author has dissented to refocus the bill on law enforcement protection issues;
• SB566 also passed second reading – the bill creates residential tax increment financing districts; of note, a previous restriction on the tool to counties with a population of 100,000+ was removed in committee;
• One truism of the legislature – government reform is never easy: HB1177 (requiring townships to adopt a capital improvement plan to spend persistent surpluses) passed third reading but heads to conference committee after the House dissented from Senate amendments;
• SB322 passed third reading and returns to the Senate, dealing with online sales taxes on third-party hotel booking sites and market facilitators;
• SB565 – amended last week to include “investment hub” regional development language – also passed third reading, keeping the discussion going on regional revenue and investment capacity.