Stay ahead of the curve as a political insider with deep policy analysis, daily briefings and policy-shaping tools.
Request a DemoHouse Republicans propose school choice expansion, quicker tax cuts in budget
Update, April 20, 2023: Senate Republicans released their proposed budget plan on April 13. Read about that proposal here.
The Gist
Indiana House Republicans released their vision for the two-year, $43.3 billion state budget Friday, prioritizing plans to significantly expand the state’s school voucher program and speed up tax cuts for Hoosiers.
Notably, the plan significantly scaled back plans for public health funding, proposed in Gov. Eric Holcomb’s version of the budget. It does keep intact some of Holcomb’s other priorities, such as ensuring students don’t have to pay for textbooks.
House Republicans hold a supermajority in the chamber, which means they don’t need Democratic support to pass the budget. House Democrats declined to comment on the proposed budget Friday. (Update: Democrats later proposed two amendments that would have provided additional property tax relief, increased public health funding and expanded pre-K, among other measures. Neither of the amendments was successful.)
Here’s how the House budget plan differs from Holcomb’s proposal, and how it’ll impact you.
A massive expansion of school choice
House Republicans say they want to spend an additional $2 billion on K-12 education over the next two years. But, that won’t all go toward public education. The state would nearly double what it spends on school vouchers, expanding eligibility for the school choice program to 400% of the income required to qualify for free or reduced-price lunches.
Currently, families making up to 300% of the amount required to qualify for free or reduced-price lunches can obtain a school choice voucher. Under the House Republican budget plan, if your family of four makes about $220,000 per year or less, you would qualify for a voucher.
Per usual, a majority of the House budget would go toward K-12 and higher education.
The expansion could meet resistance in the Senate. Sen. Ryan Mishler, the Senate’s chief budget architect, shared an open letter on Facebook criticizing a lack of accountability for schools that participate in the state’s voucher program, after multiple incidents at one school.
Less money than expected for public health
The House Republican budget appropriates $225 million over the next two years to improve public health in Indiana, a significant decrease from the $347 million Holcomb asked for in his budget. That’s money that will largely go toward local health departments.
State Rep. Jeff Thompson, the House’s chief budget writer, was asked by journalists Friday why the chamber doesn’t want to match the governor’s request.
“It’s a huge increase on what we’ve done for public health,” said Thompson, R-Lizton.
Before the pandemic, Indiana spent only $55 per capita on public health funding, compared to the U.S. average of $91, according to a report from the Governor's Public Health Commission.
That leads to disparities in what some local health departments offer to their residents. For example, some counties don’t provide HIV testing or tobacco cessation programs.
Local health departments will have to opt in to receive the money, in an effort to ease concerns about giving up control to the Indiana Department of Health after some conservatives questioned the department's handling of COVID-19.
Still, a portion of county leaders remained opposed to the idea of increased funding altogether when the concept was discussed in committee earlier this legislative session, due to fears of strings being attached to the money.
Questions about mental health funding
House Republicans did not prioritize the Holcomb administration’s goal to expand a three-part system to respond to Hoosiers enduring a mental health crisis.
That system — designed as a 988 hotline to call, mobile crisis teams to respond and then stabilization centers as alternatives to emergency rooms or jails — has remained a priority of Holcomb and Senate Republicans. The costs to fully fund the system would amount to $130.6 million each year, according to state estimates.
Asked whether the budget contains funding for the system, Thompson did not provide a specific answer.
"I think those will definitely be a consideration as we move forward,” Thompson said.
Indiana for years has lagged behind much of the country in addressing suicide, and substance use disorder is driving an alarming number of drug overdose deaths. The state ranked 41st in treatment by the nonprofit Mental Health America, and researchers have said untreated mental health accounts for $4.2 billion in costs to the state — per year.
In the Senate, Republicans released their first bill — Senate Bill 1 — in part to symbolize their commitment to addressing many of those concerns. The bill, carried by Sen. Michael Crider, R-Greenfield, and endorsed by Lt. Gov. Suzanne Crouch, received unanimous approval in the chamber. Notably, many who testified in support cited the three-part system as the reason why they supported the bill.
Senators will be given an opportunity to shape the budget in the coming weeks.
Asked Thursday whether he hoped to see the full $130.6 million in the next budget, Senate President Pro Tempore Rodric Bray, R-Martinsville, said he anticipated a more incremental approach.
“It's a really big number,” Bray said. “We need to kind of step into this in a way that we can handle the responsibility that we're trying to take on and so I don't know if you'll see us get to that number or not. We'll just try and move that direction in a bold way.”
The House budget does, however, set aside $10 million in grants that can be awarded to counties that will provide mental health services for incarcerated Hoosiers.
That's been a priority of House Republicans. House Bill 1006 by Rep. Gregory Steuerwald, R-Avon, for example, seeks to alleviate Indiana's overcrowded jails by creating a formal process for judges to refer a defendant to a mental health provider as a condition of release prior to a trial or plea agreement.
The additional $10 million in the budget isn’t directly tied to HB 1006 but it could help counties provide the necessary treatment.
"There's some issues there with inmates and how we get them in the right spot to get the right treatment,” Thompson said. “And in some cases the local jail is not the best spot."
Tax cuts
All Hoosiers could save money under the House’s budget plan.
Last legislative session, lawmakers enacted a series of tax cuts that would take effect every year through 2029. The House Republicans’ plan now, though, is to speed up that timeline and remove some guardrails that prevented the tax cuts from going into effect unless state revenue growth reached 2%.
Right now, the individual income tax rate is 3.15%, which represents $1,575 per year for someone with a salary of $50,000.
House Republicans propose cutting that rate to 3% in January 2024 and 2.9% in January 2026, rather than phasing in the cuts until 2029. If the House’s plan is implemented, someone making $50,000 per year would save an additional $325 over five years.
Altogether the cuts would generate $470 million in total savings to Hoosiers over the next two years and a cut of $1.6 billion through 2030.
Why get rid of the guardrails in the initial tax cut plan passed last year? Thompson said the state is in a “good spot” to go ahead and accelerate the cuts.
“We believe that Hoosier taxpayers would be in the best place to have those additional dollars,” Thompson said, “and they can spend those most wisely and improve their situation in their given lives.”
The Senate was largely opposed to tax cuts last year, agreeing to it in part because of the guardrails put in place. That means it may be a hard sell for House Republicans again this year.
What else is in the House’s plan
There is some property tax relief in the House budget plan, but it wouldn’t impact the bills Hoosiers receive this spring. Lawmakers have proposed temporarily lowering the property tax caps in future years, among other proposals to provide relief.
The House plan would also double the dependent child tax exemption for parents.
Like Holcomb, the House wants to appropriate $500 million to continue offering regional economic development grants under the Regional Economic Acceleration and Development Initiative (READI) program, increase Indiana Economic Development Corporation dollars and increase state police starting pay to $70,000 per year.
What’s next for the budget
The House Ways and Means Committee will amend its budget proposal into House Bill 1001 on Monday (House Republicans published a version online Friday). The committee will also consider amendments from Democrats before voting the bill to the floor.
Once it passes the full chamber, it’ll advance to the Senate where Republican leaders will propose their own spending plan. Once differences between the two versions are ironed out, it’ll go to Holcomb who is all but guaranteed to sign it.
"This is the first take at a budget and the Senate may have some different ideas and we'll see what they say," Thompson said. "It's a work in progress, no doubt, but we believe this is the right spot to be at today."
Contact Kaitlin Lange on Twitter @kaitlin_lange or email her at [email protected].
Contact Ryan Martin on Twitter, LinkedIn, Facebook, or at [email protected].
Twitter @StateAffairsIN
Facebook @stateaffairsin
Instagram @stateaffairsin
LinkedIn @stateaffairs
Header image: State Rep. Jeff Thompson, R-Lizton, speaks to journalists after unveiling the initial House Republican budget on Friday, Feb. 17, 2023, at the Indiana Statehouse. (Credit: Ryan Martin)
Read this story for free.
Create AccountRead this story for free
By submitting your information, you agree to the Terms of Service and acknowledge our Privacy Policy.
Here’s how to vote in Indiana’s primary election
Thousands of Hoosier voters will head to the polls Tuesday, May 7, for Indiana’s primary election. This year’s ballot includes a competitive contest for governor, as well as dozens of state and federal legislative races and a few school referenda. The primary will decide which candidates will represent their respective parties in the Nov. 5 …
$15B in 72 hours: ‘Our economy is on fire,’ says Commerce chief
A banner week for investment within Indiana has capped off the state’s biggest financial quarter in recent history, as three major companies agreed to deals estimated to bring in billions of dollars.
The state has long advertised itself as business-friendly, and its chief executive appeared thrilled by the week’s news.
“This is about $15 billion in about 72 hours,” Gov. Eric Holcomb told reporters on Friday. “This used to take four years to achieve.”
One announced project, an $11 billion Amazon Web Services data center in north-central Indiana, is the biggest single investment in the state’s history.
Google also broke ground on a $2 billion data center near Fort Wayne, while Toyota announced a $1.4 billion investment in its Princeton plant.
“Our economy is on fire,” Secretary of Commerce David Rosenberg said.
His agency, the Indiana Economic Development Corp., negotiated the deals. The state is offering millions of dollars in tax incentives in order to create some 1,500 new jobs.
“These industries bring generational change for families, putting more money in their pockets and allowing them the opportunity to have a better quality of life on their own,” Rosenberg said.
The projects
Amazon’s new data center will be built near New Carlisle. It’s expected to bring in at least 1,000 new jobs in the artificial intelligence and cloud storage sectors. No timetable for completion of the project was given.
According to Amazon, the company has invested $21.5 billion in Indiana since 2010, creating 26,000 full- and part-time jobs.
Google’s new data center will hire up to 200 new workers, the tech giant said, “in the coming years.”
Toyota will build a new assembly line that will assemble battery-operated SUVs by the end of 2025. It expects to add up to 340 new jobs to the plant, which Toyota said now employs more than 7,500.
The company has spent $8 billion on the Princeton plant since breaking ground in 1996, Toyota said.
The new projects’ figures represent early estimates and could change as they move forward.
Incentives aren’t the only factor
Rosenberg praised the Indiana General Assembly for passing legislation that allows the state to offer sales tax exemptions as a lure for new businesses. Both Amazon and Google will receive such boosts, and the Amazon project could receive up to $100 million in additional credits based on various incentives.
But Rosenberg stressed tax breaks are only part of the equation as the state looks to compete internationally.
“We don’t have to have the highest offer because we bring the university partners, the state and local governments, utilities — everyone around the table to make sure that company has what they need,” he said.
The Google project, for example, includes partnerships with Ivy Tech Community College on a new job training program and Indiana Michigan Power to bring clean energy resources to the local grid.
Recruiting new industries
Rosenberg said tech recruitment has been a particular focus for the IEDC, as Indiana is looking to provide an “ecosystem” for these companies to thrive off one another. The state’s semiconductor facilities will provide the materials needed for these new data centers, he noted.
Recruiting new business takes anywhere between six months to several years. Zoning, road construction, utilities and more need to be worked out ahead of time.
The IEDC has been on a hot streak, Rosenberg said. During the agency’s first 11 years, it secured just under $50 billion in new projects. It has now pulled in more than $71 billion since the beginning of 2022.
In the first four months of 2024, $20.68 billion has been pledged to projects in Indiana — the most for a quarter since IEDC’s founding in 2005.
‘Strong partners for the Indiana economy’
“The key is that these investments represent long-lasting and continued commitment to being strong partners for the Indiana economy,” said Andrew Butters, an associate professor of business economics and public policy at Indiana University’s Kelley School of Business.
Large companies came out of the pandemic looking to reorient their supply chains, Butters said, and some states have reaped the benefits of projects that might have previously moved overseas.
Indiana has been able to compete by selling its location, workforce, labor force participation in addition to offering incentives, Butters said.
“I would not be shocked to see more of these as the state attempts to transition toward more high-tech and high-skill industries,” Butters said.
Contact Rory Appleton on X at @roryehappleton or email him at [email protected].
6 races to watch in the Indiana primary election
The first openly competitive contest for the Republican gubernatorial nomination in a generation will end with Tuesday’s primary election, as will crowded races for several open congressional seats.
The primary won’t officially decide any political race — only the Nov. 5 general election can do that. But Republicans hold major advantages in statewide and many district-level contests, and who secures which nominations will go a long way toward deciding who may lead the state in the years to come.
>> Related: How does voting by political party work in Indiana?
Here are six key primary contests to watch on election night.
Governor
The race to be Indiana’s next chief executive has been perhaps the most noteworthy of the election cycle, with six Republicans bringing a variety of experience and outsider credentials to the competition.
Sen. Mike Braun has led in the polls from day one, including running up a 34 percentage-point lead in an April State Affairs/Howey Politics Indiana survey.
The other five candidates are: Lt. Gov. Suzanne Crouch, former Attorney General Curtis Hill, Indianapolis mom Jamie Reitenour and two former state secretaries of commerce in Brad Chambers and Eric Doden.
The winner of Tuesday’s Republican primary will face Democrat and former state Superintendent of Public Instruction Jennifer McCormick, who will advance for her party unopposed.
Republican candidates spent tens of millions of dollars in an attempt to stand out in their crowded pack. The primary race also featured four televised debates, including a chaotic final display on April 24.
U.S. Senate
Two Democrats are vying for the chance to replace Braun in the U.S. Senate: Former state Rep. Marc Carmichael and Valerie McCray, a clinical psychologist.
Carmichael has outspent McCray in the race by a margin of nearly $63,000 to $15,000.
Both are attempting to become the state’s first Democratic senator since Joe Donnelly’s election in 2012.
Rep. Jim Banks is running unopposed in the Republican primary.
3rd Congressional District
Banks’ entry into the Senate race leaves his seat in Congress open, and a bevy of Republicans are seeking to replace him: Grant Bucher, Wendy Davis, Mike Felker, Jon Kenworthy, Tim Smith, Marlin A. Stutzman, Eric Whalen and Andy Zay.
State Affairs has identified Stutzman, a former congressman; Smith, a self-funding former Fort Wayne mayoral candidate; and Davis, a former Allen County judge, as candidates to watch in the crowded race.
Kiley Adolph and Phil Goss are running against one another in the Democratic primary.
5th Congressional District
After initially deciding against another run, Republican Rep. Victoria Spartz reversed course to seek re-election in 2024.
Eight other Republicans are running against Spartz: Raju Chinthala, Max Engling, Chuck Goodrich, Mark Hurt, Patrick Malayter, Matthew Peiffer, L.D. Powell and Larry L. Savage Jr.
Goodrich, a member of the Indiana House of Representatives, has spent more than $2 million on TV ads as he seeks to unseat Spartz, according to AdImpact.
Two Democrats, Ryan Pfenninger and Deborah A. Pickett, are on the ballot.
6th Congressional District
Seven Republicans are attempting to replace retiring Rep. Greg Pence: Jamison E. Carrier, Darin Childress, Bill Frazier, John Jacob, state Sen. Jeff Raatz, Jefferson Shreve and state Rep. Mike Speedy.
Shreve, who ran unsuccessfully for Indianapolis mayor in 2023, has spent nearly $4 million — predominantly through TV advertising — in his bid.
Cynthia Wirth, whom Pence defeated by 35 percentage points in 2022, is running unopposed in the Democratic primary.
8th Congressional District
Republican Rep. Larry Bucshon is also retiring, and a dozen candidates in both parties are seeking to fill his seat.
On the Republican side, former Rep. John Hostettler, state Sen. Mark Messmer, former President Donald Trump White House staff member Dominick Kavanaugh and frequent Bucshon primary challenger Richard Moss are each making a push.
Fellow Republicans Jim Case, Jeremy Heath, Luke Misner and Kristi Risk are also running but trail the above pack in campaign spending.
Four Democrats are also seeking a nomination: Erik Hurt, Peter FH Priest II, Edward Upton Sein and Michael Talarzyk.
Contact Rory Appleton on X at @roryehappleton or email him at [email protected].
State Republicans keep spending to protect House incumbents in primary
House Speaker Todd Huston expressed confidence Tuesday that Republican House members will prevail over challengers in next week’s primary. Nineteen of the 63 House Republicans seeking reelection this year are facing primary races. Those challenges have been lower-key than two years ago when about two dozen candidates seized on COVID-19 discontent and other issues in …