Major proposals unclear as lawmakers enter last week of session
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Indiana’s lawmakers are nearing the end of a grueling nearly four-month legislative session, but three of their biggest priorities — aside from the budget — remain unresolved.
Legislators promised to push care-boosting, cost-cutting health initiatives, expand “school choice” options, and fight high property tax bills with relief.
Plenty could change in the session’s final days, which include a flurry of conference committee meetings and even more bouts of closed-door discussions.
Where will health care bills end up?
Following the rosy forecast last week giving lawmakers an estimated $1.5 billion more in revenue, mental health is almost sure to get an increase from its previously allotted $35 million.
Senate Bill 1 would shore up the state’s mental health crisis system, primarily by funding 988 – the counterpart to 911. But legislators still haven’t determined if the system, which is expected to cost $130.6 million annually, should be funded via overall tax dollars or a dedicated funding mechanism.
Federal law allows states to charge up to $1 each month on cell phone bills, which is the same amount Indiana now charges for 911 call centers. However, states have been reluctant to charge so much.
Sen. Mike Crider, the author of the bill, has previously indicated that he would prefer to see a stable form of funding, like cell phone fees, over a one-time infusion. Though the $1 dollar may seem steep, he said it was an important enough service to justify it.
However, the former law enforcement officer acknowledged that would be a difficult sell during a session in which the state has such a large projected surplus.
Leaders, however, remained resolute that public health funding wasn’t as likely to see major funding changes. They’ve settled on roughly $225 million over two years to boost the underfunded and beleaguered program.
“It’s a historic investment,” House Speaker Todd Huston said on Thursday. “That number — well, maybe not exactly that number – will be in the ballpark … That was one place where there seemed to be pretty close proximity” between Republican caucuses.
Members of the General Assembly appeared torn over the legislation, questioning how much funding local public health departments needed. And several House amendments added language requiring vaccine disclosures and analyzing whether health departments overstepped their authority during the pandemic.
It’s unclear whether the Senate will agree to keep those changes. The bill is scheduled for a conference committee Monday.
House Bill 1004 had a conference committee on Thursday but lawmakers acknowledged that there hadn’t yet been any final decisions. The bill initially penalized hospitals for exceeding 260% of Medicare costs, a move health care providers derided as arbitrary.
In a statement last week on the proposal, Indiana Hospital Association President Brian Tabor asked for more to be done on the insurance side of the equation.
“There must be equal accountability across the entire health care sector, or we will see harmful, unintended consequences,” Tabor said. “… We stand committed to finding the appropriate way to reduce health care costs in a sustainable manner, but there can be no long-term solution without raising low Medicaid payments and addressing how poorly insurance companies reimburse Hoosier doctors.”
Several legislators have acknowledged that Medicaid reimbursement rates are lagging, ordering the state to study the issue before the next session. On Friday, Tabor’s organization repeated its call to increase Medicaid reimbursement in the state’s two-year budget, saying it currently only covered 53% of the actual cost of care.
“Urban and rural safety net hospitals throughout Indiana are at their breaking point. Rising expenses for labor, drugs, and medical supplies coupled with sicker patients, longer hospital stays, and low Medicaid reimbursement rates … have created an unprecedented financial strain on hospitals,” Tabor said Friday.
Hospitals say they overcharge commercial payers to make up for losses under government insurance programs, one of several elements legislators would like to study before the next legislative session.
Senators seemed to acknowledge that one of their priority bills to limit how hospitals charge “site of service” fees wasn’t advancing through the House and amended part of that language into House Bill 1004. But another aiming to reduce prescription drug costs is scheduled for a conference committee on Monday.
Senate Bill 8 would require pharmacy benefit managers to pass on a significant amount of their cost savings onto consumers or payers, but has confusion mounted over what impact that measure would have.
School choice, pronoun changes and library books
It’s still not clear where lawmakers will land on a possible voucher expansion that “school choice” and public education advocates are once again sparring over this legislative session.
The House GOP spending plan sought to allocate $1.1 billion in fiscal years 2024 and 2025 to expand eligibility for the Choice Scholarship program. Senate Republicans completely nixed that plan in their proposal, however.
Huston said last week that his caucus — which has historically been more eager to grow the state’s voucher program — is pushing for at least some expansion in the next state budget.
“We’re going to make the same argument (for vouchers) whether the money is there or not,” he said. “We fund students in the state, not systems, and we just think that’s the right public policy.”
Aside from school funding, various bills dealing with K-12 classroom culture and curriculum are still awaiting action.
That includes House Bill 1608, a controversial bill to mandate that schools notify parents when a student asks for name or pronoun changes. It would also ban human sexuality instruction to the youngest students.
The bill was pared down earlier this month to remove a provision that would have required schools get explicit consent from parents if a student requests to change their name or pronouns. An amendment adopted to the bill also deleted language that would have protected teachers who refuse to use a name or pronouns that are inconsistent with a student’s legal name and biological sex.
Although the measure advanced from the Senate, the House has yet to take additional action.
Huston said last week that bill author Rep. Michelle Davis, R-Whiteland, was still “taking a look at some things.” But the House Speaker did not comment further on what might come next.
Meanwhile, lawmakers are still expected to resurrect a much-debated ban on materials deemed “harmful to minors” in school and public libraries.
A bill with such language advanced from the Senate but died in the House earlier this session without a hearing. The House Education Committee instead seemed intent on reinserting similar language from that measure — Senate Bill 12 — into another bill.
Although House legislators heard more than four hours of mostly-oppositional testimony on the amendment, a vote was never held. That has so far left the library provision abandoned from any moving legislation.
But library language could be inserted into House Bill 1447, which addresses third-party surveys and evaluations given to K-12 students. A conference committee is scheduled Monday morning, where more details could come to light about lawmakers’ plans.
Could lawmakers revive stripped-out tax relief?
Skyrocketing property sale prices during the pandemic have at last hit Hoosiers’ tax bills — which have averaged 18% higher statewide compared to the year prior. That’s according to an analysis by the Association of Indiana Counties and Policy Analytics.
Legislators said even before session’s January inception that their efforts would not affect this year’s bills — but that they’d still take action.
House lawmakers’ answer to high bills was largely in House Bill 1499. It passed that chamber with provisions to temporarily lower Indiana’s property tax caps, increase state income tax deductions and limit local tax levy boosts.
But senators — traditionally more skeptical of revenue hits — stripped the majority of those provisions out in a committee meeting this month. That left the future of the Legislature’s property tax relief efforts this session unclear.
Negotiations on the bill are ongoing, bill author Rep. Jeff Thompson, R-Lizton, said in conference committee Thursday. He offered no details on possible provisions.
“If you look up the word in the dictionary, “fluid,” it will say [House Bill] 1499,” Holdman, R-Markle, added.
But Senate President Pro Tem Rodric Bray, R-Martinsville, was confident this week that the General Assembly would pass “significant relief.”
“When we finish up with 1499, I’ll be pretty comfortable saying that there’ll be four or five substantive pieces that will help with regard to property taxes,” Bray told reporters Thursday. He said the changes could “allow” local units of government to lower property taxes and, more generally, “rein back the amount that property taxes can increase.”
His counterpart, Minority Leader Greg Taylor, warned that any property tax-cutting proposals should let communities recoup the income.
“Why don’t we put forth some funds that allow the municipalities, if they see a dip in revenue — if we say, for example, give a tax credit — that we reimburse them for that?” Taylor, D-Indianapolis, asked. “We have the resources to do it. We’re not doing anything about it.”
Senate Enrolled Act 46, for example, would let county officials provide a credit against property tax liability. But it doesn’t give those local governments a way to make up for the lost revenue. The legislation awaits action from Gov. Eric Holcomb.
Despite his funding fears, Taylor said Indiana should do more for its taxpayers this session. He criticized the state’s sizable projected surplus and said other relief efforts didn’t go far enough.
Senate Enrolled Act 325, for example, would change the definition of a “homestead” for the homestead standard property tax deduction. It adds decks, patios, gazebos, pools and more, although it would only affect assessments beginning in 2024.
“This bill could help make Indiana an even more affordable place to live, work and raise a family by aiming to lower the property taxes for many Hoosiers across the state who claim a homestead standard deduction on their property,” said author Sen. Brian Buchanan, R-Lebanon in a statement. “I take lowering property taxes in Indiana very seriously and I am happy to see the bill receive approval by the General Assembly.”
It’s also awaiting action from Holcomb. But Democrats remain skeptical.
Taylor called that legislation a “little hodgepodge,” adding, “That’s nothing. We should be providing substantial relief to taxpayers in the state.”
Other taxes are going up. Tucked in the 90–page House Bill 1050 is a one-year extension of the annual one-penny adjustment on the state’s gasoline tax. That increase usually brings in about $30 million annually.
The gas tax funds road improvements. The amendment, however, drew criticism from the state Democratic Party.
But legislators have promised this session to take a comprehensive look at all of Indiana’s taxes over approximately two years. They’re still working on the Senate Bill 3‘s final form, but Holdman appeared content with negotiations in conference committee Thursday.
The Indiana Capital Chronicle is an independent, not-for-profit news organization that covers state government, policy and elections.