Holcomb announces plans for new regional collaboration initiative in state address

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Eric Holcomb

In a pre-recorded State of the State address Tuesday night, Indiana Gov. Eric Holcomb announced plans for a regional investment program that would be similar to a popular initiative the Legislature chose two years ago not to keep funding.

But Holcomb, a Republican who is kicking off his second term, did not attach a dollar amount to the program or include funding for it in the two-year budget he recently sent lawmakers.

“We are just at the beginning of developing this initiative and we’ll work with members of the General Assembly and our mayors and our county elected officials, economic development officials, and other stakeholders, so we’re ready to rock and roll when we have the green light,” Holcomb said.

Normally, the governor gives the annual State of the State address before a joint session of the Indiana General Assembly inside the Indiana House chamber. The room is typically filled with lawmakers, special guests and members of the media. But out of safety concerns this year, Holcomb recorded the speech in advance without an audience.

During his remarks, Holcomb announced the Next Level Regional Recovery program as part of an effort to help the state recover economically from the pandemic. The program would be similar to the Regional Cities initiative that former Gov. Mike Pence created in 2015.

That $126 million program was designed to encourage collaboration within regions and spur economic growth. Seven regions developed plans and applied for grants, but the Legislature provided only enough money to award funding to three of the proposals. Those regions—which were anchored by Fort Wayne, South Bend and Evansville—praised the program and a study from Ball State University found that more than $1.2 billion had been invested in those areas of the state within four years.

The Legislature approved spending another $4 million on the initiative in the 2017-2019 budget to help other regions get ready to apply for future funding. But lawmakers decided not to put more money in the 2019-2021 budget for the program.

At the time, budget writers and the Holcomb administration said they didn’t even discuss additional funding, because the initial program was paid for with one-time dollars, as opposed to ongoing tax receipts. The state created a tax amnesty program that allowed delinquent individual and corporate taxpayers to catch up on payments with no penalties, generating money for the regional grants.

Without an ongoing funding stream, the program essentially ended.

Holcomb did not say Tuesday night how much he wants to spend on a new program—or where the money would come from. And it’s not in the budget his administration presented to lawmakers earlier this month.

The program would only be created if “the state’s financial position remains strong,” Holcomb’s office said.

Budget writers aren’t likely to make a decision about whether to fund the project until April, when they receive a revenue forecast that projects how much money the state will have to spend through June 30, 2023.

Under Holcomb’s plan, the Indiana Economic Development Corporation would oversee the program, which would focus on projects that “improve quality of place, advance industry sector development and grow workforce development initiatives among regions, educators, employers and our state’s workforce,” the Governor’s Office said.

House Speaker Todd Huston and Senate President Pro Tem Rodric Bray issued statements following Holcomb’s speech, but their comments did not address the proposal. A spokesperson for Huston did not immediately respond to IBJ’s request for comment.

Molly Fishell, a spokeswoman for Bray, said that the Senate leader “welcomes the discussion” about the proposed program. “However, we will want to have a more clear picture of what the budget is going to look like and what Hoosiers’ needs are as we work our way through the pandemic, and right now it’s too early to commit firmly one way or the other on this,” she said.

House Minority Leader Phil GiaQuinta said he didn’t know enough to say whether he would support the regional program.

“I’d like to see more details,” GiaQuinta said.

Also on Tuesday night, Holcomb acknowledged the toll the pandemic has taken on the state, specifically taking a moment of silence to honor the more than 9,000 Hoosiers who have died of COVID-19. But he emphasized the strong position the state is in, despite the pandemic.

Holcomb said the state’s healthy fiscal situation enabled him to propose a $377 million increase in funding for K-12 schools over two years and a $103 million increase for colleges and universities. He is also proposing to spend $400 million before the end of the current fiscal year on June 30 to pay down a teacher pension obligation.

Holcomb also committed to implementing the recommendations from his Teacher Pay Commission to make Indiana “one of the best in the Midwest” for teacher pay and pushing for legislation to require pregnancy accommodations in the workplace.

Holcomb made the latter a priority last year as well, but the Republican-controlled General Assembly declined to approve the legislation.

Holcomb also mentioned some of his ongoing priorities, such as lowering the state’s infant mortality rate, making improvements within the Department of Child Services, prioritizing workforce development programs and investing in roads and broadband internet.

The governor did not directly talk about racial protests and riots that broke out in cities across the state and country last summer, nor did he address the violence at the U.S. Capitol earlier this month. On Friday, Holcomb announced that he was closing the Indiana Statehouse and state government complex buildings this week out of concerns that violent protests could take place on the days leading up to President-elect Joe Biden’s inauguration.

GiaQuinta said Holcomb “missed an opportunity” by not addressing those issues.

“Probably an emphatic statement from the governor tonight should have happened,” GiaQuinta said.

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