HB 1001 / Chamber Supports
The Senate majority version of the two-year state budget has been released and will be considered by the full chamber this week. Senator Ryan Mishler (R-Bremen), chair of the Appropriations committee, offered a 201-page amendment stripping the bill of its House-passed contents and inserting new language. All other amendments were defeated along party lines and the amended bill advanced out of committee 10-2.
The updated budget bill provides funding for the recommendations offered by the Governor’s Public Health Commission ($225 million) as well as $35 million for items in the Behavioral Health Commission report.
It also establishes a process for the Office of Medicaid Policy and Planning to review and update Medicaid reimbursement rates before November of this year.
The Senate opts not to do a second round of funding for the Regional Economic Acceleration and Development Initiative (READI) and instead creates a new Collaborative Communities Program to be administered by the Indiana Economic Development Corporation (IEDC). While the goal of the program is unclear, the IEDC is tasked with developing forms and processes for review of capital or infrastructure project proposals.
Adam H. Berry, our vice president of economic development and technology, adds more on this matter: “The Chamber still supports a second round of READI funding. Broadly, the Chamber is most in favor of ‘quality of life’ initiatives – i.e. health, housing, childcare, and workforce programs – in addition to capital and infrastructure projects. Quality of life initiatives, especially those supported by supplemental funding sources, will demonstrate a return on investment that is equal to or greater than infrastructure projects though maybe not as immediate.”
Much of the provisions dealing with IEDC incentives or programs have been returned to the introduced version of the bill. A $600 million deal closing fund ($300 million/year) has been reinstated instead of the House-passed version that provided $500 million in fiscal year 2023. Similarly, the $150 million site acquisition fund will be funded in fiscal year 2024 instead of 2023 as the House proposed. The Senate seems to concur with the House that tax credits administered by the IEDC require more supervision. The provision lowering the aggregate credit limit to $250 million from $300 million remains, although the limit can be exceeded with Budget Committee approval.
A new tax credit for investments by employers to expand childcare has been added to the bill. The new credit generally follows the framework in Senate Bill 186, authored by Sen. Kyle Walker (R-Lawrence), which incentivizes investments by employers to increase childcare opportunities for their employees. The program is relatively modest with a $2.5 million aggregate credit limit.
The bill now includes a reprise of the Funding Indiana’s Roads for a Stronger Safer Tomorrow Task Force to investigate ongoing and future road funding needs. This may explain why the Senate altered the House-passed provision extending fuel tax indexing to 2029 by instead sunsetting this policy in 2025.
The budget bill does not include a $2 per pack cigarette tax increase as advocated by the Indiana Chamber and many likeminded organizations. Curiously, the bill includes a provision increasing the stamp discount for cigarette distributors from $0.013 to $0.025 per cigarette. This tax change would cost the state an estimated $12 million over the next biennium. This is in addition to a $0.72 cap on the tax rate for premium cigars which was amended into House Bill 1454 last week.
The budget bill will next be considered in the Senate chamber next week and must pass by Tuesday, April 18, which is the last day for third reading of House bills in the Senate.
Sports and Tourism Fund
Berry elaborates on the Sports and Tourism Fund within HB 1001: “A 2022 Chamber priority is on track to receive some seed funding. The Statewide Sports and Tourism Bid Fund, which was established last year by Senate Bill 245 (Sen. Kyle Walker, R-Lawrence), is likely to receive a $10 million appropriation; this figure was announced in the Governor’s budget and was reiterated in both the House and Senate versions of HB 1001. Oversight of the board will rest with the Indiana Sports Corp, and the money will be used to issue matching grants to sports and tourism boards throughout the state looking to attract events and conventions. The Chamber hopes this initial $10 million pays dividends and will increase in the next biennium.
