Indiana Gov. Eric Holcomb gave his final stamp of approval Thursday to the state’s next two-year budget, which features big spending on health care, accelerated tax cuts and a near-universal private school voucher program.
The $44 billion plan is the last Holcomb will sign before his term concludes at the end of 2024.
The biggest chunk of the budget is dedicated to K-12 education — accounting for nearly $21 billion, or 47%, of all appropriations.
Republican lawmakers touted an 10% increase in overall K-12 tuition support formula over the biennium. But much of that increase is earmarked towards the expansion of Indiana’s Choice Scholarships — which allow families to receive vouchers to attend private schools.
Starting July 1, the income ceiling for the program will raise to 400% of the amount required for a student to qualify for the federal free or reduced price lunch program, equal to about $220,000. Currently, vouchers are limited to families that make less than 300% of the free or reduced lunch income eligibility level, meaning a family of four can make up to $154,000 annually.
Charter schools are also set to see funding gains for tuition support and facility expenses.
Additionally in the budget are big boosts for mental health funding to the tune of $50 million per year. Another $225 million over the next two fiscal years will be available for a highly-anticipated statewide public health program.
Budget writers also highlighted additional tax cuts for Hoosiers.
Last session, lawmakers agreed to cut Indiana’s individual income tax from 3.23% to 2.9% over seven years. The new budget cuts that down to five years, or Jan. 1 of 2027. Acceleration of the rate reductions is expected to save Hoosier taxpayers over $360 million over the biennium.
Holcomb signed 90 other bills as well, finishing up this year’s crop of legislation with no vetoes.
- House Bill 1499 provides modest property tax relief for homeowners the next two years through a variety of mechanisms. Bills this year are averaging an 18% increase statewide. Several deductions were hiked and the bill strengthened controls on property tax levies. But the bill does nothing to limit assessed value growth that is partially causing high tax bills. A fiscal analysis estimates homeowners will save $109 million next year though most of that amount will shift to other property taxpayers.
- In the final hours of the legislative session, Republican state lawmakers resurrected a much-debated ban on materials deemed “obscene “or “harmful to minors” in school and public libraries. House Bill 1447 requires school libraries to publicly post lists of books in their collection and create a formal grievance process for parents and community members who live in the district to object to certain materials in circulation. As part of that process, school boards must review those challenges at their next public meeting. An appeals process must also be established if officials don’t agree with the request. Language in the bill also removes “educational purposes” as a reason that schools or district board members could claim legal protection for sharing “harmful material” with underage students. The charge is a felony. Public libraries will not be affected, however, despite other proposals debated earlier in the session that would have expanded the language’s reach. Additionally, the bill only applies to public and charter schools, not private schools.
- Another contentious measure, House Bill 1608, mandates that Indiana schools notify parents when a student asks for name or pronoun changes is now awaiting a signature from the governor. It also bans human sexuality instruction to the youngest Hoosier students. The bill is reminiscent of Florida’s “Don’t Say Gay” law that has been described by some as one of the most “hateful” pieces of legislation in the country.
- House Bill 1002 seeks to expand work-based learning in Indiana high schools, like apprenticeships and internships. Paramount to the wide-ranging bill is a provision that would establish accounts for students in grades 10-12 to pay for career training outside their schools. The new framework is intended to enable students to earn a post-secondary credential before leaving the K-12 system. Republican budget writers approved $15 million over the biennium for career scholarship accounts (CSAs), which will be similar to Indiana’s ESAs. Participating students can use the $5,000 CSAs to pay for apprenticeships, coursework, or certification.
- Several bills seeking to curb health care costs will now become law. They include Senate Bill 7, House Bill 1004 and Senate Bill 8. The first limits the use of physician noncompete agreements, allowing primary care doctors to more easily move around in a city. House Bill 1004 attempts to impact high hospital prices by setting new measures or goals and increasing additional reporting. Senate Bill 8 addresses pharmacy benefit managers. Learn more on all three bills here.
- House Bill 1008 bans the state’s public pension system from using investment managers that focus on environmental, social and governance factors when making decisions instead of focusing solely on returns. The anti-ESG measure originally had a high price tag but was changed significantly during the process.
- New statewide teacher firearms training laid out in House Bill 1177 will let schools with armed staff apply for a new grant — out of Indiana’s secured school fund — specifically to be used for firearms training. The legislation also establishes a standardized 40-hour curriculum, with instruction on safe handling, carrying and storage. Lawmakers gave school districts the authority to let their employees carry firearms at school a decade ago, but offered no training protocols.
- Senate Bill 391 will force school districts in Marion, Lake, Vanderburgh and St. Joseph counties to provide a proportional share of referenda adopted after June 30 with area brick-and-mortar charters. In other counties, sharing those funds remains optional, at least for now. The bill also extends Indiana charter schools’ authorization up to 15 years. Current law allows charters to be approved by the state for up to seven years.