The Indiana House approved a bill Friday that would provide $200 rebate payments from the state’s surging budget surplus.
Though below Republican Gov. Eric Holcomb’s initially proposed $225 refunds, the measure represents a concession from GOP senators who were initially reluctant, concerned the rebates would further fuel inflation.
“I think we have a good bill going forward to the Senate,” said Republican Rep. Tim Brown, who sponsored the bill. Brown said Thursday that the package was an agreement with Senate negotiators, who could consider the bill later Friday.
That compromise includes utilizing about $1 billion from the state’s record $6.1 billion in cash reserves for the rebates. Another approximately $1 billion will flow toward a state teacher pension fund’s future obligations, a debt Senate Republican leaders have prioritized paying.
The bill passed 93-6, with several Democrats—many of whom voted against the bill Thursday, when legislators first broached the deal—in favor of the funding Friday.
The Indiana House and Senate reached a deal Thursday for distributing more than $1 billion in surplus accounts and providing $75 million in direct appropriations and discretionary funding for social service programs in the wake of an abortion ban.
The deal was part of an amendment approved to Senate Bill 2.
The bill now combines elements from the Senate’s initial proposal and House, including a $200 inflation relief payment to qualifying Hoosiers, $1 billion in pension stabilization funding, agency funding for social services and a cap on the gas-use tax.
It leaves out a utility tax break that the Senate had proposed.
Gov. Eric Holcomb, who called for the special session in June to address inflation relief, released a statement celebrating the $200 payments.
“I’m grateful they have acted swiftly and collaboratively to advance this much needed bill to third reading,” Holcomb said in the statement. “No less important is the package of robust programming to strengthen the health outcomes for Hoosier women and babies… I look forward to signing it as soon as it arrives on my desk.”
Rep. Tim Brown, R-Crawfordsville, said the decrease from the proposed $225 to $200 is because of the anticipated 300,000 to 900,000 additional Hoosiers on Social Security and disability benefits who will qualify for the payments.
“This is more money going back to citizens to spend how they desire,” Brown said.
Rather than requiring an affidavit filed with the Department of Revenue, as initially suggested, Hoosiers on disability and Social Security will receive a tax credit.
Newly eligible Hoosiers can apply for the $200 tax credit when filing 2022 tax returns next year. Many of those Hoosiers, whose low income disqualifies them, don’t file income taxes regularly but still pay sales taxes.
House Speaker Todd Huston, R-Fishers, said lawmakers were talking to the administration on how to contact those Hoosiers to “make sure they know they are eligible.”
However, some lawmakers didn’t approve of the cut included in the House and Senate deal.
“There are some of us who don’t think $225 is enough,” Rep. Cherrish Pryor, D-Indianapolis, said while announcing her amendment to increase the payment to $325. “In particular, when we have residents who are struggling to pay their bills… and the state is in a very good position to help out their citizens.”
The amendment failed.
Huston said he’d love to increase the amount distributed but said his caucus prioritized getting money to those Hoosiers on Social Security and disability benefits.
“It just means that the $1 billion dollars goes into a bigger denominator and so it turns from $225 to $200,” Huston said.
Spending outlined in the new bill
Instead of a guaranteed $400 million payment for the Pension Stabilization Fund, one of the state’s only outstanding debts, the state will pay $1 billion to the fund in 2023 if reserves are over $5 billion.
The gas use tax—otherwise known as the sales tax on gasoline purchases—can decrease over the upcoming year but never go above $0.295 per gallon.
The amended bill includes the discretionary funding of $45 million in the Senate proposal with about $32 million in direct appropriations to programs such as Real Alternatives and the Nurse-Family Partnership Program.
The House and Senate deal includes an elimination of the sales tax on diapers.
Not all of the direct appropriations made it into the latest version–instead of $30 million in enhanced Medicaid funding the new proposal requests just $700,000.
Legislators narrowly voted to reject an amendment that would have allowed pharmacists to prescribe contraceptives on a 48-49 vote.
“If you’re really serious about decreasing abortion, this is how you do it,” amendment author Rep. Rita Fleming, D-Jeffersonville, said.
Rep. Ann Vermilion, R-Marion, advocated for the amendment, noting that other states who allowed pharmacists to prescribe hormonal birth control saw their abortion rates drop.
Vermilion passed her own amendment, which would require the Indiana Department of Health to contract with vendors to determine whether or not the agency should distribute low-cost or free hormonal birth control to those who need it.
“The strongest avenue to reduce unwanted pregnancies is through access to affordable and accessible birth control, education and support,” Vermilion said.
The House returns on Friday to vote on passing the final version, along with a bill banning abortion from conception with exceptions for rape, incest and life of the mother or fetus. If the Senate agrees with the House version Friday afternoon, the bill will head to the governor’s desk.
Huston said he couldn’t predict the Senate’s actions and whether they’d approve either bill.
“We’ll see what we do tomorrow and then see what they do and then take whatever action needs to be taken at that point,” Huston said.
The Indiana Capital Chronicle is an independent, not-for-profit news organization that covers state government, policy and elections.