As I head into covering my 26th regular legislative session, I have never seen such a behemoth load of major issues on the agenda.
The number of fiscal decisions to be made is staggering. Then add in major topics such as health care costs, child care needs and utility proposals and it could be one of the more momentous I have covered in my career.
With Organization Day on Tuesday — lawmakers will gather and be sworn for the official start of session — let’s break down the big topics.
The Budget
Every two years, the General Assembly crafts a biennial budget. The $44.5 billion spending plan covers everything from public safety and education funding to Medicaid and public health.
A revenue forecast is set for Dec. 18, but Indiana’s economy has cooled since its pandemic days. That means not a lot of new money will be available.
- The biggest budget discussion this year will likely be on Medicaid, which provides health care for the poor. Its explosive growth is eating up the rest of the state budget. In fact, education is no longer more than half of state spending because of the growth in that sector. Lawmakers are looking for ways to curb the increases.
- Education funding will likely hinge partially on the Medicaid issue, but if I were traditional Indiana public schools, I wouldn’t expect more than a small increase each year. Lawmakers could also authorize universal private school vouchers, which sounds more expansive than it really is. That’s because last year they increased the income guidelines so high that the program already reaches more than 95% of the population. The growing cost of the voucher program — expected to be about $600 million in fiscal year 2025 — will likely continue its ascent.
- Lawmakers will also decide what happens to major public health investments from two years ago. All 92 counties signed on to the initiative, which started with $75 million and then rose to $150 million in fiscal year 2025. Will they keep that number the same, reduce it or increase it?
- Two years ago, the Legislature gave an unprecedented amount of money to the Indiana Economic Development Corporation. It went beyond its typical budget and incentive programs and received a $500 million deal-closing fund, a $500 million round of regional development grants and a $150 million land acquisition fund. But there has been pushback against IEDC’s focus on large corporations and wild spending on the Boone County LEAP Lebanon innovation park, which still has only one tenant.
Tax discussions
Just outside the budget discussion, property taxes will be a point of focus.
Incoming Gov. Mike Braun made a major property tax cut a priority of his campaign. And while lawmakers have been considering possible tax changes they don’t seem as excited for a massive overhaul.
Property taxes provide local government funding, and any large cuts will also mean reduced services. Two years ago, lawmakers seemed set on cutting state taxes but that talk has cooled. A two-year task force on tax reform is meeting next week to finalize recommendations.
Health care
Braun has also championed a bold agenda to control health care costs. But many of the items on his wish list have struggled in earlier sessions.
In the past, GOP lawmakers have been content with transparency efforts. But there isn’t much left on that front and it remains to be seen if the General Assembly is willing to be more aggressive with insurance companies, hospitals, pharmacy benefit managers and more.
Utilities
If you have been reading our content, you won’t be surprised to know the issue of utility costs will also be addressed. Many Republicans — including Braun — believe the effort by companies to move away from coal and toward renewables has spiked costs for ratepayers. A recent attorney general opinion pressured the Indiana Utility Regulatory Commission to block these changes. And lawmakers are crafting bills behind the scenes to do so themselves.
Roads
Indiana’s road funding plan instituted in 2018 has been hit by inflation and fuel mileage improvement, which means both the state and local governments have far more needs than revenue. A two-year study of road funding needs is expected to have recommendations soon.
Child care
Child care costs are hurting families and keeping workers out of the workforce. The state has a shortage of seats, and infant care in Indiana costs 40% more per year on average than in-state tuition for a four-year public college. Last year lawmakers tweaked some regulations to try to make it easier for centers to open up seats. But the cost is still prohibitively high and turnover in staff complicates the situation. Democrats have pushed a child care tax subsidy for years and it will likely come up again.
If reading all that tired you out, imagine how lawmakers are feeling coming into this session. And I didn’t even include at least five other topics that will take time and effort. I guess we should sleep now, because the 2025 session will be one for the ages.