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Indiana Legislative Update – A Rosy Forecast by Any Other Name

Lawmakers suddenly have the sweet smell of an extra $1.5B burning a hole in their pockets. Better-than-expected employment numbers and wage growth driving increased sales and income tax collection provides an opportunity for the General Assembly to address even more of the priorities expressed by both the House, Senate and the Governor in the final budget proposal.  The prior forecast anticipated a steeper economic slowdown, maybe even a recession, and barely inflation-level gains in state tax collections. Although wary that the rate of growth is slowing, Republicans and Democrats are pleased with the updated Indiana Economic and Medicaid forecast released by the State Budget Agency late this week, “It’s a good problem to have,” said Budget Chair Ryan Mishler (R-Mishawaka), “I am confident that we can continue to make investments in the Hoosier State while exercising the discipline necessary to keep Indiana in a fiscally sound position.” When asked for the Democrat Caucus response to the revised boost in forecast numbers, Sen Greg Porter (D-Indianapolis) replied, “We are ecstatic about those numbers.  At this point we can pivot and do some good legislation and have a real budget for everyone in the State of Indiana. The D’s will be advocating for what we need. This is not just a Republican state. This is a Democrat state also.”  

The Legislature is statutorily required to pass a budget and complete their work by midnight next Saturday, April 29th. It is anticipated that they will accomplish those tasks a few days early, but the final negotiations often run into snags that keep the work going until the last minutes. 

While the vast number of bills will reach the Governor’s desk without needing to go through the conference committee process, 143 bills returned to their house of origin with changes that the author has dissented on. To learn more about this process that overtakes the Statehouse at this point of the Session, please check out this article from The Statehouse File. These are bills we will continue to closely monitor to keep language we support alive and to try to eliminate any language that is concerning. 

To date, 93 bills have reached the Governor’s desk, with 79 bills receiving his signature just this week. In these dwindling days of session, you may continue to follow the progress of bills at Governor Watchlist 2023. The only bill on your report that started the journey to the Governor was HB1449 Twenty-First Century Scholars Program.

Your bill report is attached with bills listed numerically within High, Medium and Low Priority rankings. Any bills that have received a Concurrence vote are on the way to the Governor and you may see some that have a Conference Committee Report (CCR) filed or perhaps even voted on. 

  • The Indiana House dissented from the Senate’s stripped down version of Rep Chuck Goodrich’s (R-Noblesville) HB1002, a House priority bill with high aspirations to “reinvent high school” and better prepare students for the workforce. The bill which initially provided career scholarship accounts and CTE training for students, merely establishes the career advising grant program and fund and transfers oversight of the career coaching program from the Governor’s Workforce Cabinet to the Commission of Higher Education as it passed the Senate 41-9 earlier this week. The Conference Committee met Thursday and while they seem eager to provide enhanced career counseling for K-12 students and increase student learning experiences, legislators have a lot of negotiation to do over the next week.
  • The path to reducing Indiana’s high medical costs has been a bumpy road for Rep Donna Schaibley’s (R-Carmel) HB1004. While both Chambers seem to agree health care costs for Hoosiers are a problem, why and how to fix it remain elusive. Indiana hospital prices ranked 7th highest in the nation as of 2020, with hospitals and physicians charging employers and insurers nearly three times what they charge Medicare for services, according to a Rand Corporation study. When only looking at facility charges, Indiana ranks 4th highest, charging 330% of Medicare rates. The extensively amended bill passed the Senate 49-1 on Tuesday and the House has dissented from the Senate version sending the bill to conference committee for final negotiation.
  • E-REP remains interested in and supportive of language in HB1591 that supports the region’s work on early learning education via the On My Way PreK program. The language is just a small part of this comprehensive education bill that passed the Senate 45-5 on Tuesday and has been assigned to conference committee where we will work to ensure the language we appreciate remains strong.
  • Sen Ryan Mishler (R-Mishawaka) said Sen Michael Crider’s (R-Greenfield) SB1, will “definitely” receive more funding after news of a $1.5B budget forecast windfall was announced this week.  The current budget allocates $35M of the recommended $130M to funding mental health centers across the state and funding the 988 crisis hotline that provides Hoosiers in crisis  “someone to call, someone to come help, and somewhere safe to go.” The Senate concurred with the House amendments 46-0 and the funding will be included in the budget.
  • Early this week, SB3 passed out of the House 98-0 and returned with amendments to the Senate who dissented from the changes. The Senate hopes to forego accelerated tax cuts now with an aim to eliminate income taxes altogether after review by the new tax review task force, created by Senate Bill 3. The bill has been assigned to conference committee and it appears they have only minor changes planned for the final version of the bill.
  • Sen Ed Charbonneau’s (R-Valparaiso) SB4 passed out of the House 78-21 on Monday and establishes the “health powers review task force” and defines “core public health services” to help quell the concerns of some lawmakers and their constituents to ensure that the increased funding and support for public health don’t go too far. An amendment adopted in the House also requires the task force to determine whether state agencies and local governments used authority properly, excessively, or not enough during the pandemic. “The pandemic brought to light the fact that our public health system was uncoordinated, poorly funded — and this was our opportunity to make a difference,” said House sponsor Rep. Brad Barrett (R-Richmond), “The options: turn a blind eye and continue to neglect our Hoosier citizens or create a system with the appropriate guardrails, maintain local control, and incorporate grants and accountability.” The Senate dissented from the House amendments and the bill moves to conference committee for review
  • Sen Justin Busch’s (R-Ft Wayne) SB7 provides that beginning July 1, 2023, a primary care physician and an employer may not enter into a non-compete agreement in Indiana.  The measure stops short of the original complete ban on non-competes in an effort to bring more physicians to the Hoosier state, “Senate Bill 7, in its current form, disproportionately impacts rural health hospitals in a negative way. The bill only prohibits non-compete contracts for primary care providers, which are a majority of the physicians that rural hospitals hire,” said Rep Ryan Hatfield (D-Evansville) during debate on the House floor. The bill passed the House 81-17 on Monday and the Senate has filed a motion to Concur with the House amendments, but has not yet voted on the motion.
  • The House passed SB419, a sweeping tax bill, with a 97-1 vote on Monday passing a variety of tax changes/cuts that can now be considered during conference committee negotiations. Those of significant interest to EREP include: the Historic Rehabilitation Tax Credit that could be used for the Hulman Building and/or the old Central HS Gym; A provision allowing businesses to fully deduct research and development (R&D) investments in the year they are made instead of amortizing the expenses over a period of five years; and a provision re: not requiring employers to report income/withhold taxes to the state for non-resident employees unless they work more than 30 days in Indiana. The Conferees met briefly on Thursday; just long enough to report that dialogue continues and the “situation is fluid.” We’ll continue to watch and encourage the inclusion of these and other aspects during the final week of Session.