April 21, 2023
The Big Issues
- This week, the final revenue forecast for the budget was released. It shows that the state of Indiana will have an additional $1.5B to incorporate into the biennial budget and will set the stage for final budget negotiations among the Governor, the House, and the Senate.
- In all three versions of the budget there is funding for the READI program (which is currently called the Collaborative Communities Program) at $500M, additional public health funding at $225M, and the residential housing revolving loan fund at $75M.
- Currently the budget reinstates the Funding Indiana’s Roads for a Stronger, Safer Tomorrow (FIRSST) taskforce to look at long-term road funding challenges, especially in the response to increased electric vehicle market penetration, on which Aim will have an appointment.
- Final negotiations will focus on education funding and a few other statewide fiscal issues, but we expect that the items affecting municipalities are not going to be major points of disagreement in this last week of budget negotiations.
LOCAL GOVERNMENT FINANCE
- HB 1454, authored by Rep. Craig Snow (R-Warsaw) and sponsored by Sen. Eric Bassler (R-Washington), is one of the largest bills of the session and includes many provisions relating to local government finance. Every year Aim tracks the language in this bill for both positive and negative impacts on municipalities.
- This week, the bill was heard in conference committee to work out the final details of the bill. Aim is focused on removing two provisions from the bill: language that places health care facilities in the 2% tax cap category (currently they are in the 3% category) and language that prevents municipalities from charging permit fees to franchisees that already pay franchise fees for accessing public rights-of-way.
- Aim staff have had many productive conversations with bill authors and fiscal leaders this week and hope to see a final version of HB 1454 next week that better addresses the concerns of municipalities.
RESIDENTIAL PROPERTY TAXES
- HB 1499 is the bill that contained the House’s proposals for granting property tax relief to residential taxpayers due to the rising property values last year. It included changes related to levy growth, the property tax caps, and homestead deductions.
- The Senate removed most of these provisions, leaving only a small adjustment to the over 65 circuit breaker, creating a framework for a county option to provide relief, capping levy growth at this year’s level for two additional years, and increasing the homestead deductions for two years.
- This issue is a priority for legislators at the Statehouse. Fiscal leadership will continue to negotiate what the final version of a property tax relief package will look like during the final week of session. Aim will continue to advocate for targeted, limited relief rather than sweeping changes to the property tax system with broad fiscal impact on municipalities.
- HB 1005, authored by Rep. Doug Miller (R-Elkhart) and Sen. Linda Rogers (R-Granger), includes language to remove the restrictions on which communities can use residential TIF and removes the requirement that school boards approve residential TIF. The legislation will be up for a final vote in the House next week.
- SB 20, authored by Sen. Liz Brown (R-Fort Wayne) and sponsored by Rep. Matt Lehman (R-Berne), was heard in conference committee this week for the purposes of removing language unrelated to the Aim initiative of allowing municipalities to create outdoor refreshment areas where alcohol can be purchased, carried out, and consumed for festivals, events, or as a permanent amenity. Our initiative language has broad support and we’re hopeful the underlying provisions in SB 20 will move forward in the last week of session.
- SB 317, authored by Sen. Andy Zay (R-Huntington) and sponsored by Rep. Chris May (R-Bedford), allows municipalities to prepay for purchases up to $2M and up to 50% of the project cost. This bill was heard in conference committee this week for the purpose of removing unrelated language from the bill and will be up for a final vote this week.
- HB 1016, as introduced, would have automatically opted every municipal police and fire department into a merit board system if they serve a population of 10,000 or more and have at least 12 full-time staff. Both the public safety employees and the city or town council would have to vote to opt out of this provision.
- Aim worked with members of Senate Pensions and Labor to find a compromise on this language that would have required a public hearing and vote by the legislative body this year on whether to establish a merit board in all of these communities with the option of the public safety group bringing it up for a vote next year if the legislative body chose not to establish a merit system this year.
- This week, the bill author attempted to bring this bill back to the introduced version in the conference committee report. That version of the conference committee report failed to advance in the Senate. Over the next week we will see if the Senate compromise will move forward, if the bill will be amended into another form, or if no language will move forward.
AIM LEGISLATIVE MOMENT
“Just a quick reminder for Aim members that this is a critical week, the final week of session. There’s no indication that it’s going to head into a special session This is the time to keep an eye on your email, watch for any action alerts from Aim, and watch for any urgent updates so that you know what’s happening.”
– Jennifer Simmons, Aim COO
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