Indiana Chamber Says 2022 Legislative Session Ended ‘Overall In A Good Place,’ Except For Senate’s Refusal To Repeal Anti-Competitive Tax

Indiana Chamber of Commerce President and CEO Kevin Brinegar says the 2022 Indiana General Assembly concluded “overall in a good place for the rights of businesses, for the state’s economy and for talent attraction and growth. But the Senate’s failure to support a tax cut that would strengthen the state’s manufacturing sector is a head-scratcher given Indiana’s incredibly strong finances.”

Brinegar offers comments on key bills and provisions that passed/failed in the last week of the legislative session:

Tax cuts and public finance (passed in HB 1002, but one tax provision failed to be included)

“We applaud lawmakers for two important tax relief provisions that will benefit all taxpayers. The repeal of the utility gross receipts tax will lower the energy bills of both businesses and homeowners. Additionally, with a record state surplus, a reduction in the state income tax rate for all individuals and pass-through businesses was warranted. The paydown of the $2.6 billion of the longstanding pension obligations for teachers will serve to free the state of future payments in budgets going forward. All three actions are very positive for the state.

“However, we were extremely disappointed that the Senate blocked the phaseout of the 30% depreciation floor on business equipment and machinery. That tax requires businesses to pay at that value even after the personal property has greatly depreciated below it. It’s unfortunate that Senate Republicans fail to see that this shouldn’t be happening and only serves to discourage large capital investment in Indiana. Getting rid of this tax would infuse our economy and add jobs.”

Free Application for Federal Student Aid (FAFSA) notifications and assistance (passed in SB 82)

“It’s taken several years and a winding path, but Indiana will now formally urge high school seniors to complete the Free Application for Federal Student Aid (FAFSA). The passed version includes enhanced parent/student notification requirements and an online affirmation form that empowers families to confirm that they received the notification, indicate whether they intend to complete the FAFSA and request direct FAFSA assistance. This policy will put more students – particularly those from low- and middle-income families – on the path to post-high school education and training aligned with Indiana’s workforce needs and upward economic mobility.”

Remote worker attraction/talent retention (passed in SB 361)“Communities can use the designated funding for promotional advertising or to offer residency incentives to ‘qualified workers’ – anything from grants and loans to co-working space memberships. Freeing up resources for communities wanting to retain or recruit new residents is important for several reasons. Indiana’s labor force is expected to decline over the next two decades, while the U.S. labor force increases. Also, over the next 30 years, Indiana’s population is expected to increase but at rates that are among the slowest in our state’s history. An investment to attract these workers will be well worth it. For instance, in Muncie, a remote worker with a household income of $138,000 will contribute on average $415,000 of new economic impact in spending – and $55,000 in tax revenue – over five years.”

Workers’ compensation fix and increase (passed in HB 1153)

“The Indiana Chamber supported this bill as it establishes reasonable reimbursement rate caps for workers’ compensation services provided by ambulatory surgical centers and other health care providers where such caps previously did not exist. It also establishes reasonable workers’ compensation benefit increases for the next several years, which we recognize needed to take place.”