Indiana Senate Republicans prioritize health care, biz tax cuts

Indiana’s top Republican senators said their caucus will largely prioritize health care and fiscal responsibility in the 2023 session, leaving out any education-related agenda items.

The plan was unveiled at the Statehouse on Monday as lawmakers reconvened for the first day of the legislative session. The supermajority proposals include tax cuts, mental health care funding, a statewide overhaul of local health departments, pay increases for state troopers and a policy to increase Hoosier data privacy.

The caucus’ main initiatives are laid out in eight Senate bills, although some priorities are intended to be folded into the two-year state budget that lawmakers must finalize before the end of the session in April.

Senate Bill 3, filed by Sen. Travis Holdman, R-Markle, seeks to form the State and Local Tax Review Commission to study the feasibility of ending Indiana’s income tax and reforming property taxes for Hoosiers.

Holdman said the House and Senate chambers already passed a plan to cut Indiana’s individual income tax rate from 3.23% to 2.9% by 2029.

“As we look to our long-term future, I think the goal for Indiana should be to totally eliminate the individual income tax rates in years to come,” he said. “To do that, we need to look at the entire tax system holistically instead of trying to make piecemeal changes.”

Republican Sen. Scott Baldwin, of Noblesville, additionally authored Senate Bill 2, which would change state tax law so LLCs and S Corps can deduct all state tax payments on federal tax returns.

Under federal law, individual taxpayers can get a federal tax deduction for the money they pay in state taxes, up to $10,000. But for companies that pay corporate tax, there’s no such cap on deducting state tax payments.

Baldwin said this change would level the playing field for businesses–especially small ones–and could result in $50 million in federal tax savings for Hoosier businesses.

“This change will have basically no fiscal impact on the state budget, but will help boost your business and reduce how much they have to pay in federal taxes,” Baldwin said.

Mishawaka Republican Sen. Ryan Mishler said the caucus is also eager to further pay down the Pre-96 Teachers’ Retirement Fund, which still has an outstanding liability of about $6 billion.

The state has paid down around $4 billion in recent years, Mishler noted, adding that “we can do something transformational with income taxes or property taxes,” once the state fulfills its obligation to the pension fund.

Equalizing public health statewide

Senate Bill 1, authored by Sen. Mike Crider, R-Greenfield, would provide ongoing funding to build out a system of certified behavioral health clinics around Indiana.

Crider said the bill, as currently drafted, would direct $30 million to expand the level of mental health services across the state. He emphasized the need for more centers that provide 24/7 access to care and post-crisis assistance.

“We’re going to give Hoosiers the mental health care that they need,” Crider said.

Sen. Ed Charbonneau, R-Valparaiso, will carry three major health care bills, the largest being Senate Bill 4, which seeks to restructure the state’s public health system and create “a uniform set of standards” that Hoosiers can expect when they go to a local health department.

According to the bill, the state will funnel money to Indiana’s local health departments with an 80-20 match. Local governments can choose whether to participate or not. Local health departments that do accept the new funds will be required to provide core public health services determined by the state health department.

The Governor’s Public Health Commission urged an infusion of funding for public health – originally recommending a minimum of $243 million annually. Holcomb dialed back the request in his own budget proposal, though, pursuing $120 million in fiscal year 2024 and another $227 million in fiscal year 2025.

“Where we end up going will be resolved as we go through the budget process,” Charbonneau said about a final number.

Reigning in health care costs

Charbonneau’s Senate Bill 6 would ensure that insurance claims are paid appropriately based on the location where service was provided. He said the measure would end practices that allow inaccurate billing, saving Hoosiers millions per year on medical bills.

This site of service provision would prohibit health care companies from charging higher “hospital” rates for services that are part of a hospital system but not on a hospital campus.

His Senate Bill 8 would additionally require pharmacy benefit managers, or PBMs, to pass on the rebates they receive for prescriptions to the patients buying the medicines or to all plan members.

Many times, drug companies provide PBMs with a rebate for each time a person covered by their plan gets certain prescriptions. Charbonneau said his bill would ensure those savings go to the person or plan that bought the medicine.

Another priority bill, Senate Bill 7, would end anti-competitive noncompete clauses and referral incentives for doctors

Bill author Sen. Justin Busch, R-Fort Wayne, said the legislation would enable doctors to compete on their own terms, helping to promote competition in the health care marketplace and help lower prices.

“These incentive agreements limit competition in the health care marketplace and don’t do anything to improve care for patients,” he said. “It’s time we ban this anti-competitive behavior for the good of Hoosier patients.”

Boosts to state trooper salaries

Republican Sen. Chris Garten, R-Charlestown, outlined a Senate plan to increase pay for Indiana State Police.

The governor said last week that he wants to earmark $30 million to raise state troopers’ starting salary from roughly $56,000 to $70,000. GOP senators weren’t clear on what type of pay increases they support, but Garten noted that state police recruiting “has never been more challenging” than it is now.

The state police agency’s most recent recruitment class was the smallest since 1946, graduating just 23 candidates, Garten said. That’s compared to nearly 300 graduates across two classes in 2006.

Separately, Sen. Eric Koch, R-Bedford, proposed an amendment to the Indiana Constitution to allow judges to deny bail if a suspect “clearly poses a substantial risk to the public.”

The Indiana constitution currently requires every criminal suspect to be offered bail, except in cases of murder and treason.

“This has created a difficulty for some of our local courts when they’re trying to set bail for dangerous criminal suspects who aren’t charged with those two crimes,” Koch said, though he noted that state law does allow judges to increase a suspect’s bail if they pose a risk to the public.

If the bail is set too high, however, the Indiana Supreme Court has ruled that could be considered unconstitutional.

“We think this is a tool the Indiana criminal justice system needs to have in its toolbox,” Koch said.

Protecting Hoosiers’ personal data

Rounding out the Senate GOP’s priorities, Sen, Liz Brown, R-Fort Wayne, filed Senate Bill 5, which creates a “bill of rights” for Hoosier data privacy that would allow consumers to monitor how their data is being used and have it deleted if they wish.

“This legislation is a consumer empowerment bill, establishing valuable consumer rights, like the right to review what data has been collected about you, the right to correct that information, or even have it deleted,” Brown said.

The measure also includes a requirement for businesses to have annual data protection assessments and security checks.

If adopted, the bill will go into effect this year.

Businesses collecting sensitive data—like medical and biometric information or details about religious beliefs, race and ethnicity—would have a heightened requirement for receiving prior consent from the consumer before they process any of that information.

To ensure compliance, Brown said the Indiana Attorney General would be authorized to investigate and seek penalties for suspected violations.

“This legislation will place Indiana on the cutting edge of protecting our Hoosiers, while ensuring their businesses clearly understand what is required of them if they operate in this state,” Brown said.

Education missing

None of the Senate GOP’s priorities center on education, however. That’s despite budget requests from Republican Gov. Eric Holcomb to inject billions more state dollars into schools.

Republican Senate Pro Tem Rodric Bray said education “is the most important thing we do here in the state of Indiana,” but pointed to previous education funding boosts in 2019 and 2021 budgets.

When asked about Holcomb’s education priorities, Bray did not speak on the governor’s proposal to increase tuition support and instead said the state has “some limitations” on spending due to inflation and a possible impending recession. He also did not comment on Holcomb’s proposal to eliminate textbook and circular fees for Hoosier students. Pre-K expansion “is certainly part of the conversation, but that’s obviously an expensive process, as well,” Bray continued.

House speaker Rep. Todd Huston additionally said his caucus would “take a look” at Holcomb’s textbook fee proposal and advocated for giving parents and schools more flexibility in spending, but declined to throw his support behind Holcomb’s agenda priority.

“I think we’ll look at what opportunities are out there … and how we give parents the flexibility to use those dollars to get the curricular materials they need for their kids,” Huston said.