Medicaid caps and tax relief top Senate Republican list

Senate President Pro Tem Rodric Bray, right, discusses the majority caucus’ legislative agenda on Wednesday, Jan. 8, 2025, at the Indiana Statehouse. (Casey Smith/Indiana Capital Chronicle)

Indiana’s Senate Republicans pegged property tax relief as its top priority during the 2025 legislative session — but leadership cautioned that a firm plan is still far from being codified.

The majority caucus, which unveiled its new agenda on Wednesday, is also promising to address rising Medicaid costs, water resource management and state contract accountability.

Meanwhile, lawmakers in the House also convened on the session’s first day, and House Democrats shared their priorities.

Senate Majority Leader Rodric Bray emphasized that the 2025 session will, above all else, center around the next state budget. Given Indiana’s cooling economy, he said crafting a new two-year spending plan will be “particularly challenging.” 

“Our revenue growth, while positive, is not at the record levels that we saw in recent years. We’re also grounded with a Medicaid budget trying to explode, and inflation that is causing the cost of just about every function of government to increase,” Bray continued. “Nevertheless, Senate Republicans are committed to passing another balanced budget this year.”

Sen. Travis Holdman, R-Markle, said Senate Bill 1 will be the primary property tax relief vehicle this session — a response to Gov.-elect Mike Braun’s proposed tax reforms.

The senator said the measure, in its first draft, follows Braun’s four-pillar plan that includes immediate property tax cuts for homeowners, as well as the introduction of a cap to limit future growth. Other portions of Braun’s proposal include transparency on tax calculations and reforming the tax referendum process.  

The bill’s exact language has yet to be published, however. Senate GOP staff said priority measures aren’t expected to go online until early next week.

“Property taxes are always a topic of conversation in this building, but they’ve been especially prominent in recent years. In Indiana, we’re fortunate to have low property taxes, but many Hoosiers have been understandably frustrated by large, year-over-year increases in the bills,” Holdman said, adding that property tax relief was a top campaign issue during the 2024 gubernatorial race.

With “a lot of ideas on the table” from other senators and the House, Holdman said a final property tax bill is likely to be piecemeal and incorporate elements from those other proposals.

“I fully expect this bill to change as it moves to the Senate, the House … Together, we are committed to providing property needs to Hoosiers, but we’ve also got to balance the needs for schools and local units of governments like counties, cities, towns and townships,” Holdman said. “Our goal is to find a sweet spot for this bill.”

Medicaid proposal

Another priority bill would introduce a cap to the state’s Healthy Indiana Plan, an expansion of traditional Medicaid to cover moderate-income Hoosiers who can’t afford other options.

Sen. Ryan Mishler’s proposal would limit the number of enrollees to 500,000 — below the 692,028 beneficiaries currently on HIP — and limit Hoosiers to 36 months of coverage over their lifetime.

“Keep in mind that this is childless adults that are able-bodied, working individuals that are on this plan and will continue to be on this plan,” said Mishler, R-Mishawaka. “… there’s a lot of work to be done with Medicaid, but I think this bill is a start to work with the administration and get that under control.”

The fiscal impact of the legislation is uncertain, as 90% of HIP’s costs are covered by the federal government and the remaining 10% is funded by a hospital provider tax and cigarette tax.

Additionally, the bill would also reintroduce work requirements — something that would have to be approved by the federal government — with limited exceptions. Mishler didn’t rule out the possibility that the proposal would create another waitlist.

“If you want to take away waitlists, then you have to say, ‘Do we want to cut education to not have waitlists? I mean, those are the decisions we’ll face here,” Mishler said.

House Democrats disagreed.

“Where there’s a will, there’s a way,” said House Minority Leader Phil GiaQuinta.

GiaQuinta, D-Fort Wayne, and his colleagues pointed to a plan to expand school vouchers to the wealthiest Hoosiers as well as dollars sent to the Indiana Economic Development Corp. as potential sources of funding for Medicaid and public school priorities.

Eliminating waitlists, which include seniors, disabled Hoosiers and parents seeking child care, is one of the goals for the caucus in 2024 alongside property tax relief and “fully funding” public schools.

Cracking down on water, vendor performance

Another senate priority bill seeks to require permitting for basin-to-basin water transfers and other large, long-distance water pipeline projects. The move comes amid a contentious debate over a pipeline to pump water from an aquifer in Tippecanoe County to a mammoth industrial campus in Boone County.

“Indiana really is blessed to have abundant water resources. But as experts have been saying for years, the water is not evenly distributed within our state. In recent years, Indiana has become a favorable location for some up-and-coming industries that are highly water dependent, like EV battery facilities and data centers,” said bill author Sen. Eric Koch, R-Bedford. “This is a great thing for the future of our state, but it has also brought to the forefront issues about how we allocate our water resources.” 

Koch said Senate Bill 4 ensures water projects make sense from both an economic and hydrological standpoint. Specifically, the legislation would require a utility or large private sector user to get approval from Indiana’s Department of Natural Resources before carrying out a water project. 

Koch said a second permit process outlined in the bill would loop in Indiana’s Utility Regulatory Commission “for all large, long-haul water pipelines.” 

Senate Bill 5, meanwhile, targets large state government contracts. Bill author Sen. Scott Baldwin, R-Noblesville, said his caucus wants to require state contracts of $500,000 or more to include clear performance expectations for vendors, along with penalties if those expectations are not met.

Baldwin said his goal is to create a “no-bid list” of companies that are temporarily disqualified from bidding on any more state contract, though vendors can appeal that decision.

The bill also requires state agencies to submit quarterly progress reports about major state contracts to the state budget committee and undergo review for making “significant” contract amendments or applying for new federal funds that require an Indiana match. 

“The General Assembly spends months hammering out a state budget and allocates how dollars should be spent. So it stands to reason that we would want to increase our legislative oversight of budget execution,” Baldwin said, while making clear that the bill does not intend to “point the finger” at any specific vendor.

He further told the Indiana Capital Chronicle the measure would additionally apply to state officeholders. Baldwin said he’s been working on the bill for “several months” — prior to the Capital Chronicle’s reporting on multiple no-bid contracts awarded by the Secretary of State’s Office. 

While the current draft of the legislation does not specifically address no-bid contracts, he did not close the door on such language in upcoming iterations.