Reducing health care costs, pursuing tax breaks and preparing the next generation of Hoosiers for the workforce are among the top priorities of business leaders as state lawmakers return to the Indiana Statehouse Monday for the 2024 legislative session.
This year’s session is a non-budget year, meaning that any legislation with significant fiscal impact is unlikely to be considered. But lawmakers will have a litany of topics to discuss, including child literacy, regulations on large water withdrawals and high rates of absenteeism in K-12 schools.
Gov. Eric Holcomb will add to the agenda when he lays out his priorities in a news conference on Monday and in his State of the State address Tuesday evening.
Here are some of the top issues on the radar of business groups.
Health care affordability
The Indiana General Assembly enacted several measures in 2023 aimed at curbing high health care costs, and now it’s time to see whether those efforts will have a discernable impact, lawmakers and business leaders say.
In the 2023 session, lawmakers passed legislation preventing hospital systems from requiring primary care physicians to sign noncompete agreements, a measure aimed at addressing a doctor shortage in Indiana.
Following the recommendation of the Governor’s Public Health Commission, lawmakers dramatically expanded funding for county health departments, offering up to $225 million for counties that choose to participate in the program.
In May, Gov. Eric Holcomb signed into law Senate Enrolled Act 8, which attempts to regulate pharmacy benefit managers, or PBMs, the powerful middlemen who negotiate drug prices between drugmakers, insurers and pharmacies.
“If they lower costs for employers and Hoosiers, that’s great, but we need to take a step back and see if that actually happens,” said Ashton Eller, vice president for health care policy and employment law for the Indiana Chamber.
A December report from the Chamber showed Hoosiers pay the second-highest health insurance premiums of all 50 states, and Indiana ranks among the worst states for health and well-being, tied for 41st for smoking, 38th for obesity and 38th for drug-related deaths.
The Chamber also supports a $2 increase in the cigarette tax, which hasn’t been raised since 2007. That would generate over $370 million in revenue in the first year, according to its calculations, which could then be used to help fund increasing Medicaid obligations.
There may be some fine-tuning and tweaks made to a new program that allows students to create state-funded career scholarship accounts that can be used toward technical coursework and credentials.
While business interests support the concept generally, there remain lingering concerns about how that program is being administered, both at the state level and the school district level, and whether it will have the desired impact.
“We need more high school grads to be able to enter into a manufacturing position,” said Andrew Berger, senior vice president of government affairs at the Indiana Manufacturers Association. “That’s our litmus test, so anything that would improve that, we’re going to support it. If we can get students into those programs earlier, that’s going to benefit us in the long term.”
Jason Bearce, vice president for education and workforce development at the Indiana Chamber, wants employers to have a “greater voice” in the process.
Groups like the chamber are also seeking more clarity around what qualifies as a regional intermediary organization, which will serve as a bridge between students and employers. Intermediaries can include workforce development boards—like Employ Indy, the Marion County workforce board—as well as industry trade groups such as the Indiana Manufacturers Association.
Business personal property tax
Business leaders support increasing the threshold for the business personal property tax exemption, a perennial issue for the Indiana Chamber.
Rep. Peggy Mayfield, R-Martinsville, introduced legislation last year that would have exempted companies that own machinery, equipment and other tangible goods that cost them, in total, less than $250,000, from paying the state’s business personal property tax. The current threshold is $80,000.
The bill was shelved as legislative leaders prioritized the creation of a state task force to review Indiana’s entire tax structure.
Mayfield told IBJ she doesn’t plan to take up the issue this year, and it’s unclear if another lawmaker is up to the task.
“It’s understandable that the Legislature would prefer to take a pause on tax legislation this year and allow the work of the state and local tax review task force to be completed,” said David Ober, vice president of taxation and finance at the Chamber. “However, it’s important that we don’t lose momentum.”
Economic enhancement district
The battle over the new economic enhancement taxing district in downtown Indianapolis is likely to continue.
The Indy Chamber and Downtown Indy Inc. last year supported the Legislature’s last-minute approval of the Mile Square district, but the Indiana Apartment Association and some other property owners impacted by the new enhancement fee will try to modify or roll back the new law.
The proposed fee on Mile Square property owners that is aimed at increasing public safety and cleanliness in the heart of the city while reducing homelessness was approved by Indianapolis City-County Council in December, but there remain concerns among some supporters of the ordinance that even if a state-city board were to authorize the tax, the state law supporting it could be reversed during the next General Assembly.
Attorney and former Indiana House speaker Brian Bosma, the spokesperson for an organization called DefendDowntown.com, which includes commercial businesses, restaurant owners, residential homeowners and the influential Indiana Apartment Association, told IBJ that the coalition is asking the Legislature to reconsider the concept.