9/22 Torchbearer Weekly Policy Update
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- In 2025, States Continued to Be More Active Than Congress
- Indiana Governor Floats November Special Session on Redistricting
- Indiana Energy Secretary Blasts Local Moratoriums, Calls Energy Development ‘Patriotic’ Task
- Power Up Indiana
- New Bill Seeks to Restore Millions in Medicaid Funding to Indiana Hospitals
- Federal Reserve Cuts Key Rate by Quarter-Point, Signals Two More Cuts This Year
- Decline in K-12 National Reading, Math, Science Scores Probed by US Senate Panel
- State Regulators to Rule on NIPSCO Subsidiary Plan for Data Center Customers
- Treasury Releases New Proposals for ‘No Tax on Tips’
- Medicaid Work Requirements Delayed Until 2027 Following Federal Action
- Share the Torchbearer Newsletter with Your Network!
- Important Dates
In 2025, States Continued to Be More Active Than Congress
The 2025 state legislative season saw over 135,500 bills introduced, surpassing Congress in key areas like tech, finance, and health.
Why it matters: State legislatures are proving more effective than Congress in lawmaking, with states like Colorado achieving a 73.5% effective rate compared to Congress's 2%.
- States with single-party control are particularly active, with Texas and Georgia showing high enactment rates.
Driving the news: Special legislative sessions contributed significantly, with a 47% effectivity rate from 420 bills introduced in seven states.
- These sessions focused on responding to federal deregulation efforts and fiscal challenges.
Looking ahead: In 2026, states will continue to address tech, finance, health, and energy issues, striving for innovation and clarity amid federal uncertainties. (Governing)
Indiana Governor Floats November Special Session on Redistricting
Gov. Mike Braun suggested that Indiana lawmakers might convene a special session in November to redraw congressional boundaries.
Why it matters: Redistricting ahead of the 2026 midterm elections could solidify GOP control of the U.S. House, aligning with national Republican strategies.
- Indiana's timeline is tied to national GOP politics, potentially impacting its collaboration with the Trump administration.
The big picture: States like Ohio and Florida are already preparing for redistricting, with Indiana potentially following suit.
- A special session could cost around $240,000 and might address multiple topics beyond redistricting.
What they're saying: Democratic opposition, led by Common Cause Indiana, criticizes the move as a partisan power grab.
- GOP legislators are starting to shift their stance, with some previously opposed lawmakers now supporting the idea. (Indiana Capital Chronicle)
Indiana Energy Secretary Blasts Local Moratoriums, Calls Energy Development ‘Patriotic’ Task
Indiana's top energy official, Suzanne Jaworowski, criticized local bans on energy projects for harming the state's reputation.
Why it matters: These moratoriums deter industry investment, potentially stalling economic growth and energy development in Indiana.
- Jaworowski emphasized the need for a statewide siting statute and plans to collaborate with the Indiana Economic Development Corp. to map receptive communities.
The big picture: The lack of a unified policy leads to inconsistent experiences for companies, with some facing prolonged delays and significant costs.
- Jaworowski advocates for legal action against communities that "string companies along," suggesting lawsuits as a deterrent.
What's next: A "siting center" will be featured at Indiana's Global Nuclear Energy Economic Summit in November to promote welcoming locales for energy developments.
- Indiana aims to align with federal initiatives like America250 by encouraging communities to support energy and industrial growth. (Indiana Capital Chronicle)
Power Up Indiana
Indiana is encouraging employers to train and promote current employees with its new Power Up Indiana initiative.
Why it matters: This initiative aims to enhance the skills of Indiana's existing workforce, providing pathways for employees to advance within their companies and contributing to economic growth.
- Employers can receive reimbursements of $5,000 per trained employee, up to $50,000 annually.
Details: The program covers technical training, leadership development, and apprenticeships, with a requirement for a 25% wage increase post-training.
- All Indiana-based businesses registered with the secretary of state and with an unemployment tax account are eligible.
- Companies must submit a training plan and meet specific wage criteria to qualify.
What they're saying: "Growth doesn’t have to come from somewhere else. It’s already here, inside the businesses here in Indiana," said Commerce Secretary David Adams.
The big picture: This initiative is distinct from other training programs and aligns with new high school graduation requirements that emphasize career readiness, showcasing Indiana's commitment to workforce development.
What's next: The state will monitor the program, ensuring compliance and effectiveness, while regional workforce boards will manage its implementation and fund distribution.
Go deeper: More information about the program may be found here.
New Bill Seeks to Restore Millions in Medicaid Funding to Indiana Hospitals
Language buried in a COVID-19 relief bill during President Trump's first term is costing Indiana's safety-net hospitals over $100 million annually in lost federal reimbursement payments.
Why it matters: The loss of Medicare Disproportionate Share Hospital (DSH) funding impacts hospitals serving high percentages of Medicaid and Medicare patients, forcing difficult financial decisions.
- Rural hospitals and those with large Medicaid populations are particularly affected.
Driving the news: A new bill by U.S. Sen. Jim Banks aims to restore DSH funding by reverting changes that disallowed counting dual-eligible Medicaid patients.
- The bill, supported by U.S. Sen. Kirsten Gillibrand, would also allow states to distribute unspent DSH funds from previous years.
The big picture: Safety-net hospitals have been hit hardest, with Methodist Hospitals in northwest Indiana and Reid Health facing significant financial losses.
- Methodist saw a $27 million cut in DSH funding in 2023, while Reid hasn't received any DSH dollars in the past two years. (Inside Indiana Business)
Federal Reserve Cuts Key Rate by Quarter-Point, Signals Two More Cuts This Year
The Federal Reserve lowered its key interest rate by a quarter-point to about 4.1%, marking its first cut since December.
Why it matters: This move aims to address growing concerns about the U.S. labor market as hiring slows and unemployment rises. Lower rates might stimulate borrowing and economic growth.
What’s next: Fed officials project two more cuts this year, but just one in 2026, which could disappoint Wall Street's expectations for more aggressive rate reductions.
Between the lines: The decision faced minimal dissent, showing a united front despite internal and political pressures. President Trump's attempts to influence the Fed, including recent personnel changes, highlight tensions over its independence.
Zoom out: Unlike the Fed, central banks in Europe and the UK are holding rates steady, reflecting different economic challenges and inflationary trends. (Inside Indiana Business)
Decline in K-12 National Reading, Math, Science Scores Probed by US Senate Panel
Recent data reveals a decline in average reading, math, and science scores among certain grades since before the pandemic.
Why it matters: The Senate Committee on Health, Education, Labor and Pensions is scrutinizing the state of K-12 education to address these troubling trends.
Driving the news: NAEP data shows an average science score drop for eighth-graders by 4 points since 2019, with math and reading scores for 12th-graders falling by 3 points. Only one-third of 12th-graders are college-ready in math.
Indiana’s approach: Indiana's Secretary of Education, Katie Jenner, highlights initiatives like early literacy rebuilding and outcomes-based contracting to improve student performance.
- Indiana saw a historic rise in third-grade reading scores by nearly 5 percentage points this year.
The backdrop: Political debates arise as Democrats criticize President Trump's education policies and the impact of dismantling the Department of Education.
- Sen. Patty Murray voiced concerns over the state of education under the current administration. (Indiana Capital Chronicle)
State Regulators to Rule on NIPSCO Subsidiary Plan for Data Center Customers
The Indiana Utility Regulatory Commission is set to decide on NIPSCO's proposal to create a subsidiary, GenCo, to manage large power projects like data centers.
Why it matters: This move could set a precedent as the first regulated utility in the U.S. to spin off a subsidiary for large-load customers, potentially impacting power rates and infrastructure costs.
Driving the news: Data centers require vast power supplies, and Indiana is seeing a surge in such proposals. NIPSCO argues that GenCo would protect regular customers from the financial risks associated with large-scale projects.
- Opponents argue that this could lead to an unregulated monopoly and increased costs for consumers.
Yes, but: Concerns over lack of oversight and potential cross-subsidization highlight the risks involved. Critics, including local governments and consumer advocates, worry about NIPSCO's ability to choose winners and losers.
What's next: The IURC's decision is expected by the end of the month, which will be pivotal in shaping Indiana's energy landscape for years to come. (Inside Indiana Business)
Treasury Releases New Proposals for ‘No Tax on Tips’
The Treasury Department is advancing regulations to implement President Trump's "no tax on tips" promise, set to benefit certain tipped workers from 2025.
Why it matters: The new rules specify which occupations qualify and define what counts as a "qualified tip," impacting workers in various service industries.
Details: Workers in roles like sommeliers, DJs, and yoga instructors can deduct up to $25,000 in qualified tips annually. However, the benefit phases out for those earning over $150,000.
- Tips must be voluntary and reported on W-2 forms to qualify.
By the numbers: The provision could increase the federal deficit by $40 billion through 2028, with 4 million workers potentially affected.
What's next: The rules will apply retroactively from January 1, 2025, but payroll and state taxes remain applicable. (IBJ)
Medicaid Work Requirements Delayed Until 2027 Following Federal Action
Indiana's new Medicaid work requirements will be delayed until 2027, impacting over 652,000 Hoosiers enrolled in the Healthy Indiana Plan.
Why it matters: The delay, due to federal guidelines, affects low to moderate-income residents, many of whom are already employed or qualify for exemptions.
The backdrop: Indiana lawmakers sought to impose work conditions earlier, but federal approval is pending on other HIP 3.0 components like provider taxes and wellness incentives.
Impact of new federal law: The "Big, Beautiful Bill" caps provider taxes, potentially straining Indiana's finances. Medicaid expenses, now at $5 billion, are the state's fastest-growing cost.
What’s next: Indiana's Medicaid budget is under review, with potential stress from federal limits and increased SNAP administration costs looming. (Indiana Capital Chronicle)
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Important Dates:
Interim Study Committee on Courts and the Judiciary: Tuesday, September 23rd at 1:00 pm
Interim Study Committee on Pension Management Oversight: Wednesday, September 24th at 9:00 am
Interim Study Committee on Energy, Utilities, and Telecommunications: Wednesday, September 24th at 1:30 pm
Interim Study Committee on Corrections and Criminal Code: Thursday, September 25th at 10:30 am
Interim Study Committee on Public Health, Behavioral Health, & Human Services: Thursday, September 25th at 1:00 pm
Interim Study Committee on Agriculture: Thursday, October 2nd at 1:00 pm
Interim Study Committee on Child Services: Thursday, October 2nd at 1:00 pm
Interim Study Committee on Environmental Affairs: Wednesday, October 8th at 11:00 am
Interim Study Committee on Fiscal Policy: Friday, October 10th at 1:00 pm
State Board of Education Meeting: Wednesday, October 15th at 9:00 am
Interim Study Committee on Public Health, Behavioral Health, & Human Services: Wednesday, October 15th at 1:00 pm
Organization Day: Tuesday, November 18th