Bills filed by lawmakers to offset the anticipated increased demand for social services following the Senate’s proposed abortion ban passed their respective chambers Tuesday, both using the state’s reserves to fund a variety of maternal health services.
House Bill 1001, has millions in tax credits for adoption families, repeals the state tax on children’s diapers and expands eligibility for the state’s automatic taxpayer refund.
“The summary of the bill is that we as Hoosiers are looking at a fiscal impact that will help Hoosier families, moms and babies with between $79 million and $80 million,” Rep. Sharon Negele, R-Attica, told the Ways and Means committee.
Across the Statehouse, the Senate Appropriations Committee listened to testimony related to Senate Bill 2, which would dedicate $50 million as an “initial” investment to four agencies which oversee programs related to healthy pregnancies and families.
Many who testified on both bills expressed gratitude for the money but said Hoosiers needed more.\
“The Indiana Council of Community Mental Health Centers and Mental Health America of Indiana strongly support the allocation of funds in (these bills),” Monique Kulkarni, the senior director of clinical services at Valley Oaks Health, told both committees. “However, we believe that the permanent changes proposed in Senate Bill 1 warrant significant increased and permanent, sustainable funding as well as an enhanced infrastructure support for the mental health needs of pregnant women, children and families.”
The House and Senate bills had many similarities but the Senate version allows agencies to choose which services to fund based on grant applications, while the House version has more specifics.
The House’s $10 million investment in the nurse-family partnership, which covers 46 counties, received praise for aiming to increase coverage to all 92 counties. The program pairs first-time mothers with a healthcare worker to guide them through the process and support their emotional and physical needs.
“Secondly, we strongly support the provisions around the sales tax exemption on diaper sales,” Jessica Fraser, the director of the Indiana Community Action Poverty Institute, said. “We know how expensive diapers are for low-income families and sometimes it can eat up a large chunk of their budget.”
Fraser did ask for an increase in the $10 million allocated to the Child Care and Development Fund, which offers child care expenses for impoverished families. She said the average cost of care of Indiana newborns was 19% of the state’s median income, far higher than the recommended 7%.
Negele said, prior to testimony, the goal of the CCDF provision was to make a “dent” in the waitlist for vouchers through CCDF.
Fraser’s colleague, Andy Nielsen, a policy analyst with the organization, said the package of adoption credits, which would cost the state between $22.9 million and $24 million, would primarily benefit high-income Hoosiers.
“To realize the full tax benefit in this bill, a single Hoosier adopting one child would have to make at least $84,600,” Nielsen said. “Below this threshold, the taxpayer would be unable to utilize all these benefits.”
Sen. Ryan Mishler, R-Bremen
In 2019, Indiana had 80,851 births and the state averaged 3,044 adoptions annually between 2017 and 2021, the fiscal impact statement said.
Angela Espada, the director of the Indiana Catholic Conference, pushed for paid family leave across the state, possibly in the form of tax credits for companies that provide it to their employees.
She also asked lawmakers to make the state’s child tax credit a monthly benefit, similar to the federal emergency provision during COVID-19, rather than an annual payment.
“Ultimately (some) may have accumulated debt and they use (the yearly payment) to pay off their debt,” Espada said. “When people receive a monthly income they were able to move into a better place (with) a better school system.”
Cost associated with Automatic Taxpayer Refund
The House’s legislation conforms with Gov. Eric Holcomb’s wish to use $1 billion of the state’s reserves to send $225 checks to eligible Hoosiers in a taxpayer refund. It also expands the proposal by sending checks to Hoosiers on disability or Social Security.
Those Hoosiers don’t file taxes and don’t qualify for the refund, as required under the existing automatic taxpayer refund law. Under the bill, they could file an affidavit with the Indiana Department of Revenue, which would verify the affidavit, and receive the $225.
But the revenue department requested roughly $3.4 million in funding to achieve that, saying the excess work meant they might need to hire an outside contractor.
“I ask that the committee consider how these implementation challenges can be addressed while still achieving your laudable goals,” Steve Madden, the DOR’s director of tax policy, said. “We of course will work very diligently to implement the will of the General Assembly; it’s just that there’s going to be a cost… and it’s going to take time.”
Between 300,000 and 800,000 more Hoosiers could qualify, according to the bill’s fiscal note. Madden said some verification could be automated by partnering with other agencies, such as the Indiana Bureau of Motor Vehicles or the Indiana Family and Social Services Administration.
If the department receives 500,000 applications and rejects 1%, or 5,000, those 5,000 Hoosiers may decide to file an appeal known as a legal protest. Madden said the agency processed approximately 500-1,000 legal protests a year, meaning their workload could increase five-to-ten times over.
Roughly half of Hoosiers haven’t received the first $125 payment, hampered by a paper shortage, Johnston said.
Rep. Ed DeLaney, D-Indianapolis, criticized the repeated distribution, noting that the $1 billion could instead fund other priorities.
“We’re… choosing between dribbling out money and making long-term investments in our schools and the possibility of transit railroads,” he said.
Espada, with the Indiana Catholic Conference, advocated for targeting the refund to low-income Hoosiers.
“For some of us who are privileged to earn a higher income, $225 is not going to make a big difference in our lives,” Espada said. “But for those on the lower end of the scale, it would.”
Senators disagreed with Holcomb and the House, introducing their own version of inflation relief in Senate Bill 3. The bill dedicates $400 million to the pre-1996 Teacher Pension Fund on top of a $2.5 billion payment this year, and $215 million for capital projects that exceeded their 2021 budgets due to inflation.
For Hoosiers, the bill would repeal a one-cent gas tax increase and freeze future gas tax increases. It also temporarily suspends sales tax on utility bills for six months.
Bills move to their respective chambers
All three bills passed their committees unanimously, moving to their full chambers for a vote later this week.
The House Ways and Means Committee approved two minor amendments to its bill, including one from bill author Negele that would allow pregnant people using Medicaid to receive noninvasive prenatal screenings at any time during pregnancy requiring prior authorization.
The second amendment, from Rep. Chris Campbell, D-West Lafayette, codified a rule passed in the previous session that expanded postpartum Medicaid coverage to one year, making it law.
The bill passed the committee unanimously, 22-0.
In Senate Appropriations, Sen. Ryan Mishler, R-Bremen, slightly tweaked SB 3 to allow for flexibility in the capital project appropriation, which will be funded with whatever “remains” from the other parts of the bill.
This means that $215 million appropriation could grow or shrink, depending on whether senators change portions related to the utility taxes or pension fund.
Mishler, the Appropriations chair, told committee members that he wouldn’t support adding more funding requests beyond the $50 million at the top of the meeting.
“It’s not because I don’t think those issues are important but, in non-budget years, I’ve always been pretty firm on not opening up the budget,” he said. “This special session has given me a lot of heartburn… because it’s against everything I’ve done for 16 years.”