Session takeaways: Next year’s budget, a ‘quieter’ cycle and Indianapolis nabs some wins

Indiana’s latest legislative session is over after a breakneck nine weeks that saw nearly 175 bills cross the finish line.

After promising a session featuring “measured” changes, lawmakers took up some contentious proposals but shelved others, including several aimed at the city of Indianapolis. And the Legislature has teed up a busy budget season for 2025.

Below, the Capital Chronicle team breaks down its top three takeaways.

Mega-session in the making

Legislative leaders sidestepped most ideas with price tags, delaying Medicaid, education, taxes and roads decisions until next year’s longer, budget-building session.

“We tried to stay away from those things. … We probably did punt a few things to 2025,” Senate President Pro Tem Rodric Bray told reporters Thursday, after the Senate concluded its business for the year.

House Speaker Todd Huston defended those decisions, telling reporters, “Most things end up having – in some way, shape or form–a budget impact.”

“Budget sessions are always going to be busy. There’s always going to be a lot of issues to address,” said Huston, R-Fishers.

But Bray said he expected a “pretty monumental” next session, highlighting a two-year task force seeking to reshape Indiana’s tax system.

“We may see some fairly significant tax reformation around the state of Indiana … (20)25 will be a significant year, I think,” Bray, R-Martinsville, added.

The Legislature’s two primary budget architects have already started putting the pieces together.

“Medicaid, education (and) how much revenue will we have? It’s that simple, isn’t it?” said Rep. Jeff Thompson, chair of the House’s Ways and Means Committee.

Senate Appropriations Committee leader Sen. Ryan Mishler, R-Mishawaka, has been outspoken about his Medicaid growth worries. Spending on the program grew 2% last year, from 15% of the budget to 17%. That occurred even as the state’s spending on education fell by the same percentage, from 50% to 48%.

“You can’t sustain that,” Mishler said last week. “Now we find ourselves with … unexpected growth in that eight-month period between the two forecasts. I think we have to get our arms around it.”

In December, the Family and Social Services Administration (FSSA) announced a nearly $1 billion “variance” over the remainder of its Medicaid budget. In response, the agency adopted several cost-cutting measures, shelving a 2% Medicaid index and halting an attendant care program for parents of disabled children that it said counted for much of the unanticipated growth.

In response, lawmakers approved a proposal increasing FSSA accountability, primarily by requiring the agency to present a plan for monitoring Medicaid expenses to the Medicaid Oversight Committee along with an explanation of the $1 billion error.

“We just have to figure out what we can do and you still have to offer the services, but at a cost you can afford,” Mishler said. “I guess that’s where we have to find that middle spot.”

Across the aisle, House Minority Leader Phil GiaQuinta noted an additional wrinkle to budget negotiations: the expiration of enhanced federal funding designed to offset COVID-19 losses.

“The budget has really been backed up by a lot of federal dollars,” said GiaQuinta, D-Fort Wayne. “I think there’s going to be a time when the rubber hits the road here with regards to … vouchers or private funding versus how we’re going to fund public education. So I think that’s going to be a real question on the table next year.”

Indiana has long allocated the largest portion of its budget on education. That sector could see major changes next year.

Mishler wants to overhaul Indiana’s private school vouchers with a grant program that would allow all Hoosier families — regardless of income — to choose where their students get educated. His Senate Bill 255 was discussed at the Statehouse but did not move during the session.

“I just took all of the different facets of education funding and threw them all into one pot, pretty much,” Mishler said of the legislation. “The vouchers, the (career savings accounts), the (education scholarship accounts). Parents say they want choices and we claim that we give them choices. We just have to decide what choices we’re going to give them.”

Whether the overhaul will have teeth is still to be determined, though.

“I (heard the bill) because a lot of people asked me about it. So this year I just kind of put it out there to see what kind of feedback I got. (It) was, ‘We want to protect ours. We don’t want a new one. We want to protect what we have,’” he continued. “I got a lot of that. … I think you’ll see some changes but I don’t know what at this point in time. But there’s enough people, I think, that want to see some changes in that, so it’s something we’ll take a look at.”

State lawmakers have also teed up a road funding overhaul.

Municipalities, particularly the city of Indianapolis, have long complained the state’s formula shortchanges them. Separately, state officials are worried about the transition away from gas-powered vehicles, which funds the bulk of Hoosier road construction and maintenance.

As part of the overhaul, lawmakers expect to consider having the Indiana Department of Transportation (INDOT) re-take former state highways ceded to Indianapolis. That includes almost 20 Indianapolis roads, according to a 2023 INDOT asset report.

Though debate has centered on Washington and Meridian streets, Rep. Jim Pressel, R-Rolling Prairie, said, “The conversation is really about all of them.”

But Pressel, who leads the House’s roads-focused committee, already has concerns.

“We set a dangerous precedent if we start taking back roads that were relinquished years ago,” Pressel said. “If we take them back, is everybody going to come to INDOT and say, ‘Well, you took it back for Marion County. Now are you going to take ours back?’”

He noted that the state pays local units to take possession of roads, but units typically don’t pay the state to re-take them.

Pressel also pushed for pavement condition ratings, asking, “What is going to cost us to bring them back up (to par)? We need to know that for a lot more (roads).”

Huston said infrastructure is key for a state known as the “Crossroads of America.”

“We’re going to have to look at if and how that might need to be modernized,” he told reporters last week. He said he’s looking forward to “hav(ing) that discussion” with “local government partners.”

But leaders have also been skeptical of communities asking for more road funding without maxing out their wheel taxes and other funding mechanisms. Indianapolis, for example, has historically shot down such tax increases until state funding increases.

Was it a quieter session?

Republican legislative leaders previously promised a less “aggressive” 2024 session that focused more on bills to tweak and fine-tune, rather than overhaul. Citing bustling sessions in the three years prior, they vowed to stay away from gambling expansion, water fights or costly initiatives during the non-budget reconvening.

And aside from a statewide reading overhaul that built off a “science-of-reading” effort begun last year, many of the other bills that passed were low-stake code changes.

To that end, lawmakers snuffed out several contentious bills.

That included proposals to further restrict abortions and ban certain funding for the procedures. Those bills and others like them never received hearings.

Also avoided was a potential culture war fight over the use of “gender” in state law. House Bill 1291, authored by Rep. Chris Judy, R-Fishers, would have replaced the term “gender” with “biological sex” in certain Indiana statutes to describe the condition of being physically male or female. The bill never made it on a committee schedule.

Another piece of legislation — which sought to expand handgun carry rights in the Statehouse and capitol complex—was additionally watered down in the final hours of the session to allow just four statewide officeholders the privilege. Although included in the original bill, an estimated 700 staff across those offices were excluded from the final language that passed.

But the session wasn’t without some criticism and controversy. Tensions ran high, for example, over a bill to define and ban antisemitism at Indiana’s public colleges and universities.

Laws that will invalidate 21 local ordinances limiting pet sales and further strip protections on some Indiana wetlands also attracted hours of passionate testimony. They were among the first measures this year to get signatures from Gov. Eric Holcomb. 

Some measures split members of the same party, like a House Democrat’s proposal promoting subdermal birth control implants. Senate Democrats pushed back after intrauterine devices were removed from the bill in January following a dispute about whether they cause abortions. The bill is waiting to be signed by the governor.

Bray said he was content with how lawmakers did.

“It felt like a little more heavy lifting than I thought at the start, but that’s how the process goes. People file bills that are important to them, and that are important to Hoosiers across the state, and we’re here to deal with them, so we did,” he said. “I think by the end of the time, there were some challenging days and some challenging bills to deal with — so it may not have been quite as inconsequential, but I’m happy to be done and feel like we did some good things.”

Senate Minority Leader Greg Taylor, however, contends the session was anything but.

“We were all kind of shocked,” he said of some pieces of legislation. “I thought it was supposed to be a really smooth and simple session.”

“But we stayed strong, and look what ended up happening at the end of the day,” Taylor, D-Indianapolis, said. He pointed to several compromises struck between both chambers, and both parties, including on Indianapolis-specific issues.

GiaQuinta concurred.

“We had a pretty good session ourselves when I think of what our members were able to accomplish — not just from individual bills but, what they were able to do with regard to stopping bad legislation,” he said.

Indianapolis largely fends off targeted measures

Although legislation impacting units of local government is common, the city of Indianapolis is a popular target for Republican state lawmakers who disagree with local Democrats’ policies.

Legislators advanced several proposals: jeopardizing rapid bus transit funding, repealing a district to finance downtown upkeep, prohibiting the abundant no-right-on-red signs posted in high-traffic areas, and even settling a dispute between billboard businesses and residents of historic neighborhoods.

Rep. Blake Johnson, D-Indianapolis, said he began the legislative session feeling “discouraged” by the spate of targeted proposals, and even dipped into despair as a Senate bill imperiling the Blue Line advanced through the House. Key, he said, was maintaining “hope” throughout.

Unlike previous years, many of the bills were significantly weakened or died.

With just a week left in the session, Huston announced he’d struck a compromise with Indianapolis government and transportation officials, killing that targeted legislation. Lawmakers recast the district-ending bill into one with some modifications.

Language banning the no-right-on-red posts died early on, while the billboard amendment didn’t get past committee. Pressel instead ordered both sides to get negotiating or face the consequences next year, with Johnson asking residents to get breakfast rather than testify.

Johnson said “building authentic relationships” was most important to mitigating or heading off such legislation.

“It’s really like every other workplace when you want to get something done. I spent hours and hours and hours with my colleagues … talking to every member I could who might be willing to listen about the impacts of the Blue Line, what that meant for my community, what it meant for the investments and all of that,” Johnson said.

“It is recognizing that you can’t do anything alone when the building relies on 150 people to come to some kind of consensus or determination,” he added. Advocacy from people outside the Statehouse – city officials, city councilors, residents and more – was also key, he said.

Indianapolis said it worked to “find common ground” with both Democrats and Republicans at the Statehouse.

“The City is grateful for every resident and business owner who used their voice to advocate for Indianapolis during this legislative session. As a result of these collective efforts, critical investments were protected in our downtown core – the economic engine of our state – and in the infrastructure that keeps our city moving,” a city spokesperson said in written comments Monday.

Despite their successes this session, Democrat lawmakers have continued to push back against legislation that overrides local policies.

“This continued (trend) I’ve seen attacking local government — you’ve seen the list, it really needs to stop. I think we got a little better there at the end. Finally, some things went the right way,” GiaQuinta said. “… but it’s continuing session after session and that’s one thing I’d like to see change.”

Republicans, meanwhile, say they’re committed to the city’s success — even if they disagree on local policy goals.

“We want to be good partners. It’s challenging at times, of course. They are — probably, I suspect — frustrated with things that we do around here. We get a little frustrated with the things they do,” Bray said.

“But we are here together and it’s very important. They’re our capital city. We need them to thrive; they want to thrive. And we’ll continue to work together and communicate to make sure we’re making good policy for them,” he added.

There’s always next session.

Sen. Aaron Freeman, R-Indianapolis, has for several years put forth legislation affecting the bus rapid transit lines, called the Blue Line agreement a “compromise all parties can live with” when it was announced.

He told the Capital Chronicle that his “conscience is clear” on the transit topic.

“I firmly have a position: Indianapolis is going in a not-good direction,” he said, and noted that bill authorship is the “one tool in (his) tool bag” to accomplish his goals.

“For people that say we shouldn’t be meddling in Indianapolis – well, first of all, I live here. Second of all, I love it here, and I want to see it do really, really well,” Freeman said. “We can disagree over no-turn-on-red policies. We can disagree over a bus service that’s going to bankrupt the city of Indianapolis, and that’s firmly on them. I’ve done everything I can do to help.”

Asked about his plans for future legislation, Freeman said he’d “always” bring proposals to “influence and help” the city.

“I’ll see you next January,” he concluded.