Transgender disputes and tax reform dominate first half of the Indiana Legislature's 2023 session

While hundreds of bills made it to the half-way point, two major themes rose to the forefront — disputes over transgender and gay youth and a Republican push for tax cuts.

LGBTQ+ issues

State lawmakers have directed intense legislative focus toward transgender Hoosiers this session — centered on school-age children — with more than two-dozen such bills filed.

Several highly controversial proposals also tangled with the similarly contentious concept of “parents’ rights.” They often drew hours of testimony and crowds of protesters whose chants were audible through heavy doors.

One House bill would enshrine parents rights into law, declaring that parents have “the fundamental right to direct” how they raise their children. And it would ban courts from removing a transgender child from their parents based only on the parents’ refusal to seek gender-affirming care or otherwise support a child’s transition.

House Bill 1407 centers on one Hoosier family — and its estranged transgender daughter — whose case is still in court. Despite the ongoing legal fight, mother Mary Cox spoke publicly in support of the legislation in a hearing last month.

A Senate bill, however, would ignore a parent’s choice to support their child’s transition. The proposal would ban medical practitioners from knowingly providing gender-affirming health care to transgender children, without exceptions for parental permission.

Asked about parents having to move out-of-state to consent to gender-affirming care for their children, Senate Pro Tem Rodric Bray (R-Martinsville) said, “I don’t want to see that.”

“But parents have their choice to make,” he told reporters last week. “That’s not the intention of this legislation. It’s to care for those kids.”

Meanwhile, another House bill offered competing answers to the question of parents’ rights.

House Bill 1608 would require schools to notify parents if a student requests to change their name or pronouns — effectively outing the child — and block adherence to the student’s request without a parent’s written consent.

But it would also prevent schools from disciplining teachers that still use a child’s old name or pronouns, even with parental permission to use the new, preferred versions.

“What I don’t understand, as a parent, is, if I have rights, how can I not compel the institution … to call my child by the name that I told them [to use]?” Jennifer Smith Margraf asked lawmakers last month. She’s a parent, Spanish teacher and an Indiana State Teachers Association board member.

Rep. Jake Teshka, R-South Bend, told her that schools can’t infringe on the free speech of individual teachers.

That bill would also prohibit instruction on “human sexuality” — previously a list of banned topics like sexual orientation and gender identity — before 3rd grade. Sexual education already typically starts in the fourth grade under existing state standards.

Asked why House Republicans had filed more bills on transgender topics than in years prior, House Speaker Todd Huston (R-Fishers)  told reporters, “There are a lot of bills filed about a lot of topics. And I always say, ‘Don’t judge us where we start, don’t judge us in the middle — judge us where we end.'”

Majority Floor Leader Matt Lehman, R-Berne, told the Capital Chronicle the higher number of transgender bills was more about “issues at the local level, most of those around education.”

Opponents say it’s strategic.

“It’s clearly House Republicans playing to their base,” House Minority Leader Phil GiaQuinta (R-Fort Wayne) told reporters last week. He attributed the focus on LGBTQ issues to gerrymandered district maps under which elections are decided during primaries, Republican against Republican.

Tax reform, relief

Hoosiers want lower taxes, and lawmakers of both parties want to deliver — but without tanking the state’s finances.

One House bill would provide multiple remedies to temporarily drop property tax bills, including through a short-term property tax cap and an increase in state income tax deductions. It would also curb how much local units can raise their tax levies, and increase the renter’s deduction from $3,000 to $4,000.

Rep. Jeff Thompson, R-Lizton, chairs the powerful House Ways and Means Committee, authored the bill. It passed the House 94-1.

But leadership in the House and Senate have suggested they will wait until bills are mailed out before deciding whether to take any action at all on property taxes in the current legislative session. Any property tax relief legislation is unlikely to affect taxpayer bills due May 10. Those taxes are expected to go up an average of $228 or more.

A priority Senate bill, meanwhile, would study the feasibility of ending Indiana’s income tax and would “holistically” examine the state’s sales and property tax structures.

Lawmakers have already passed a plan to cut Indiana’s individual income tax rate from 3.23% to 2.9% by 2029. But bill author Sen. Travis Holdman, R-Markle, has said the state’s long-term goal should be “to totally eliminate the individual income tax rates.”

Bray told reporters last week that he wanted to reach a lower income tax rate “with thoughtfulness” and while ensuring that “the economy is continuing to grow.”

Huston said “We have to be honest with ourselves — that’s a lot of revenue to replace, if you’re going to cut the entire state income tax.

“On any of these things, you’re trying to fit the right balance,” he added, “between having the right economic policies; most importantly, doing the right thing by Hoosiers; but also maintaining the types of services that people expect from state government.”

The two chambers reached an agreement last session to cut Indiana’s income tax rate from 3.23% to 2.9% over seven years only

But House Republicans inserted language into the proposed state budget that passed last week that would accelerate existing income tax cuts without the revenue and pension guardrails. The current income tax rate of 3.15% would drop to 3% next year and 2.9% in 2026. The cut would come three years earlier than currently scheduled.

That disagreement will likely be a point of contention between the two sides in the second half.

Capital Chronicle reporter Whitney Downard contributed reporting.