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Request a DemoIndiana budget proposal: Where Senate Republicans stand on school vouchers, mental health and free textbooks
The Gist
Indiana Senate Republicans released their plan for the two-year, $43.3 billion budget Thursday, rejecting two proposals from House Republicans to expand the state’s school choice program and speed up income tax cuts. Senate Republicans also did not include money in their budget proposal for trauma care system improvements.
The two caucuses are, however, on the same page when it comes to how much to spend on right-sizing the state’s public health system, though neither wants to fund it at the level Gov. Eric Holcomb requested.
Senate Democrats on the Senate Appropriations Committee preferred the Senate’s proposal over what passed the House, but they still have some concerns.
Here’s how the Senate budget plan differs from the House’s proposal, and how it would impact you.
K-12 education spending and school choice
Senate Republicans want to pump an additional $2.5 billion into state education over the biennium, but that wouldn’t mean an expansion of the state’s school choice voucher program to more Hoosiers. The upper chamber wants to stick with the status quo when it comes to determining who is eligible for the vouchers.
Senate Republicans rejected House Republicans’ plans to expand the program to families making 400% of the income required to qualify for free or reduced-price lunches. Under the House Republican budget plan, if your family of four makes about $220,000 per year or less, you would qualify for a school choice voucher.
“I can never sit here and say never, because [House Republicans] are pretty adamant about it,” said Sen. Ryan Mishler, the Senate’s chief budget architect. “So we'll just have to talk about that in the next few weeks.”
Currently, families making up to 300% of the amount required to qualify for free or reduced-price lunches can obtain a school choice voucher. That would continue under the Senate Republican plan.
Mishler, a Mishawaka Republican, said his caucus decided to spend the extra dollars that would have been used to expand vouchers elsewhere.
Both chambers will likely compromise and land somewhere in the middle. Of course, Democrats would prefer to spend less money on school choice programs altogether and instead divert more funding toward public education.
While traditional public schools would receive more funding under the Senate Republican plan, they could lose some future property tax dollars. The Senate plan allows charter schools to receive some of those dollars moving forward, reducing charter school reliance on state grants over time.
Democrats shared concerns about the proposal during the Senate Appropriations committee meeting Thursday, because they worried it would hurt traditional schools in their communities.
“We know many of our school corporations are in impoverished areas, still struggling with assessed value, still struggling with a variety of funding issues,” said Gary Democrat Sen. Eddie Melton, the ranking minority member on the committee. “So that's something to keep an eye on.”
Free textbooks
It’s all but a done deal: You likely will no longer have to pay for your child’s K-12 textbooks or other curriculum material.
House and Senate Republicans are on board with Holcomb’s plans to provide free textbooks for all K-12 students. Now the question is: Who will pay for it?
While Senate Republicans want to backfill the costs with state money, the House didn’t have a specific line item in its budget to do so. Instead, the burden would fall to schools.
Free pre-K for more Hoosiers
More families would be eligible for free pre-K education under the Senate’s plan, versus the House.
Eligibility for On My Way Pre-K would expand from families making 127% of the federal poverty level income to those making 150%. The state is not putting more money into the program; the current funding isn’t being used up by the eligibility requirements already in place.
Democrats unsuccessfully tried proposing an amendment to expand eligibility to 400%.
“I don’t think that it goes far enough to truly provide that opportunity for our kids for economic freedom,” said Sen. Fady Qaddoura, D-Indianapolis, “so that they can grow up in a society where they can earn, they can succeed and they can take care of their kids and hopefully end the generational cycle of poverty.”
Mental health funding
As expected, the Senate budget contains additional funding for mental health programs to the tune of $35 million over two years — a slight increase of the amount initially contained in Senate Republicans’ keystone mental health legislation, Senate Bill 1.
That number, though, still falls well short of the $130.6 million needed each year to fully fund a mental health crisis system, according to state estimates. Lawmakers envision that system as one solution to Indiana’s growing struggles with suicide and addiction.
Senate and House Republicans are still discussing ways to fill the funding gap — and how much of the gap to fill — for this budget.
One option is an increased cigarette tax to pay for the programs, which is what the Indiana Chamber of Commerce has suggested, but has historically been rejected by Senate Republicans. Another is a cell phone surcharge, similar to how 911 is funded.
Agreement on public health spending
Senate and House Republicans are on the same page when it comes to the dollar amount for public health initiatives in your community, but neither includes as much funding as the governor asked for.
Holcomb requested $315 million in his budget, while the House and Senate both appropriated $225 million. That number doesn’t include the added money for emergency preparedness initiatives.
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 led to disparities in what some local health departments offered its residents.
Most of the new money would go toward grants dedicated to local health departments. Those departments that opt in to receive the extra funding could use it for things like tobacco cessation programs, testing for HIV or education about trauma prevention.
One key difference between the Senate and House’s health spending is that the Senate’s proposal doesn’t contain a separate line item to better Indiana’s trauma care system.
Tax cuts
Senate Republicans also aren’t itching to speed up income tax cuts for Hoosiers.
Last legislative session, lawmakers enacted a series of tax cuts that would take effect every year through 2029, moving the tax rate down from 3.23% to 2.9% over time. The Senate budget proposal would keep that plan intact.
House Republicans, however, want to speed up that timeline and remove some guardrails that prevented the tax cuts from going into effect unless state revenue growth reached 2%. If the House’s plan is implemented, someone making $50,000 per year would save an additional $325 over five years.
But both plans would give Hoosiers the same 2.9% income tax rate starting in 2029.
Mishler said he would rather pay down the unfunded liability on the pre-1996 teacher retirement fund in order to free up money in future years, rather than move forward with incremental tax cuts.
“It gives us flexibility to do something more transformational,” he said.
What else is in the Senate’s plan
The Senate proposal also contains additional money for pay raises for state employees, trails, attracting direct flights, economic development initiatives and employer child care expenditure credits.
Senate Republicans also kept language added into the budget on the House side prohibiting state money from being used for Indiana University’s Kinsey Institute, which conducts research on sexuality, gender and reproduction.
What’s next for the budget
Senate Appropriations voted the amended budget bill out of committee Thursday by a 10-2 vote, after rejecting multiple amendments from Democrats. Democrats on the committee were split on their bill votes.
Once it passes the full chamber, Senate and House Republican budget writers will have to work through the differences in their two versions and vote on the bill one last time. Holcomb is all but guaranteed to sign the final version.
The biggest unknown at this point is what the updated state revenue forecast will show when it’s released later this month. If the forecast is dimmer than expected, lawmakers could be forced to make cuts somewhere in the proposed budget.
That’s why Mishler said he set aside a large amount of money for reserves, 13.8% in the first year and 14.7% in the second, in order to act as a cushion.
“I’m happy with it,” Mishler said of his proposal. “It’s balanced.”
Contact Kaitlin Lange on Twitter @kaitlin_lange or at [email protected].
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Header image: Senate President Pro Tempore Rodric Bray, R-Martinsville, answers questions at a press conference following the 2023 State of the State Address on Jan. 10, 2023, at the Indiana Statehouse. (Credit: Ronni Moore)
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$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].
What happens after the primary election?
Hoosiers will narrow their choices for governor, U.S. Senate and various other state and federal races during the Tuesday, May 7, primary election. Winners of the primary election races will represent their respective party in the Nov. 5 general election. If a contest features only one Republican or Democrat, that candidate will automatically move on. …
Newcomer Clay challenges longtime incumbent Young for state Senate
A central Indiana state Senate race may soon serve as a barometer for state Republican politics, as a young upstart groomed for leadership faces down a longtime incumbent in the upcoming primary election.
The race for Senate District 35, which includes parts of Marion and Hendricks counties, revolves around similar conservative beliefs held by wildly different candidates.
State Sen. Mike Young, 72, is a Statehouse fixture who refuses to attend his committee meetings or caucus with his fellow Republicans but nonetheless offers nearly four decades of legislative experience to his district.
Philip Clay is a 29-year-old retail banker with a young family and no political experience. He seeks to bring more collaboration to the role.
If elected, Clay would be the only Black Republican in the Indiana General Assembly.
“Unpopularity in the Statehouse doesn’t always translate to being unpopular in the district,” Mike O’Brien, president of 1816 Public Affairs Group and former Hendricks County Republican Party chairman, said of Young.
“You have a young guy working hard, and that’s kind of what it takes to beat a long-term incumbent,” O’Brien said. “We see examples of that every cycle. Maybe this is the one this time.”
Young no longer caucuses
Young, who served in the Indiana House of Representatives from 1986 to 2000 before moving to the state Senate, made headlines in summer 2022 when he decided to no longer caucus with his party.
“I won’t caucus because I don’t trust our leadership,” Young told State Affairs. He stressed his decision had nothing to do with his failed amendment to the state’s abortion ban, saying he wrote a letter expressing his intent to leave before the abortion bill was heard.
Young said he remains part of the caucus, as he is a Republican senator, but simply does not attend meetings.
He has also stopped going to most meetings of his assigned Senate committees: Corrections and Criminal Law, Elections, Family and Children Services, and Pensions and Labor.
“I go to them if they affect my district,” Young said.
He attended a Jan. 17 Pensions and Labor Committee meeting to argue down Senate Bill 54, which Young said would have hurt Wayne Township firefighters by forcing them to consolidate with the Indianapolis Fire Department.
Young said all senators are asked to pick five committees they’d want to serve on, but Senate President Pro Tempore Rodric Bray did not select him for any of his listed options. Young informed Bray he did not intend to attend future committee meetings.
Bray also replaced him as chair of the Corrections and Criminal Law Committee and removed him from the Judiciary Committee. Attempts to reach Bray for comment were unsuccessful.
“You don’t have to be on committees to get things done,” Young said. “When the bill comes to the floor, you have the opportunity to amend just like you would in committee. So there’s nothing really lost or harmed by it.”
Clay’s push for office
Clay, who has lived within the district in Plainfield for most of his life, said Young’s decision to no longer caucus motivated him to get into the race.
“There’s a lot of things Mike and I agree on, but after Mike left the Republican caucus and voiced some personal grievances with the Senate … it’s kind of like watching your favorite player not show up to the game,” Clay said.
Clay said one of his primary campaign platforms is improving workforce development within the district as. He co-founded Arthur Clay and Co., an organization focused on preparing men of color for their future careers.
Like Young, Clay is anti-abortion. Whereas Young seeks to eliminate property taxes, Clay believes reform is the more prudent path. Clay also hopes to improve education, make adoption easier and increase public safety if elected.
Clay trained with both the national and state GOP in 2022, completing the Republican National Committee’s Rising Star and Indiana Republican Diversity Leadership Series training programs geared toward recruiting minority conservatives for public office.
“There are so many well-qualified minority conservatives that we’ve not done a good job in either messaging to or helping them explore the Republican Party,” Clay said.
“There are Black conservatives across the country,” he said. “To have the opportunity to be the only one in the state is an incredible honor. It’s absolutely something I don’t take lightly.”
Support from Indiana Chamber
Both candidates have spent tens of thousands of dollars on their campaigns as of March 31.
Clay spent just under $34,000 in the first quarter of 2024, leaving him with about $30,000 left for a final push.
Young has spent around $29,500 and has about $45,000 remaining.
While Young has raised from various sources — including other lawmakers, small-dollar donors and $22,000 in personal loans — much of Clay’s backing has come from one source: the Indiana Chamber of Commerce.
The Chamber’s political action committee, Indiana Business for Responsive Government, has given Clay almost $21,000, plus another $11,000 from in-kind donations.
Jeff Brantley, the Chamber’s senior vice president for political affairs, said Young’s voting record does not often align with his organization.
“He talks a lot, but he can’t get things done in one of the more rapidly growing suburban districts in the state,” Brantley said of Young. “Constituents aren’t being fully served.”
Brantley said Clay could bring both a fresh perspective as the Legislature’s only Black Republican and new life to the seat.
“The district needs and deserves someone who really has the energy and the engagement,” Brantley said.
Young said the Chamber was “beating up on him,” even though he has worked to get Chamber-supported legislation through the Statehouse. He listed reducing the state’s license plate tax as one example.
The senator has been endorsed by the Indiana Family Action PAC, Indiana Right to Life, Hoosier Conservative Roundtable, American Family Association of Indiana PAC and the Indiana State Police Alliance.
Taxes key to Young’s reelection bid
If reelected, Young hopes to end property taxes for all Hoosiers, particularly those over 65.
“Speedway has neighborhoods where most people have lived in their homes for 50 years, and they’re on fixed incomes,” Young said. “And when they get a 48% [tax] increase, that’s killing them. They can lose their house.”
Young has pushed the idea for more than a decade, and he believes momentum and money exist to get it done next year, when the Legislature will set the state’s budget.
Indiana could be the first state to end property taxes for seniors “with no strings attached,” Young said.
He said he would also work to “stand up for conservative values”: supporting tax cuts, opposing a plan to give “illegal immigrants” driver’s licenses and creating a rule in the state senate requiring 24 hours’ notice to changes in the state budget.
O’Brien, the former Hendricks County GOP chair who has followed Young’s career for years, said the senator’s long incumbency will be tough to beat. He added that Young’s reputation as a thorn in leadership’s side isn’t necessarily a detriment in the May 7 primary election.
“Go-give-’em-hell gets you a lot of votes,” O’Brien said. “That’s why [former President Donald] Trump is doing what he does. It’s just the mood of the electorate right now.”
Contact Rory Appleton on X at @roryehappleton or email him at [email protected].