Hoping to capitalize on a record-breaking year of $22.2 billion in committed capital investment, Gov. Eric Holcomb laid out an economic development agenda Wednesday that includes increased funding to buy land, close deals and improve the state’s workforce while attracting more jobs and employers to Indiana.
As lawmakers prepare to return to the Indiana Statehouse next week to begin forming a two-year budget, Holcomb is asking for $300 million for a “deal closing fund” and another $300 million-per-year tax-credit cap, both of which would be used to entice businesses to the state.
The governor is also asking for an additional $500 million for a second round of the Regional Economic Acceleration & Development Initiative, or READI, which support economic and community development projects throughout the state. Indiana used $500 million in federal funding from the American Rescue Plan Act of 2021 to fund the first round.
The funding requests are part of the governor’s ambitious $3 billion “Next Level Agenda,” which calls on state lawmakers to approve historic investments in education, public health and state employee salaries.
“We’re addressing – in an unprecedented way – some big and bold, strategic areas that are going to take our state truly to the next level in terms of public safety, in terms of public health, in terms of public education, in terms of community development, in terms of infrastructure connections and strengthening our local partnerships and bonds,” Holcomb said during a news conference Wednesday.
You can watch the governor’s address here:
The governor also requests a revolving fund of $150 million for site-acquisition efforts, which will include buying land for the planned innovation park in Boone County. The Indiana Economic Development Corp. has previously asked the State Budget Committee for money to purchase land for that project, but the fund would allow the agency to continue its efforts without asking for additional funding.
To date, the IEDC has secured about 6,000 acres for the LEAP Lebanon Innovation and Research District, which could be as large as 11,000 acres depending on private sector investment.
The governor also proposes doubling funding for the Manufacturing Readiness Grant Program, which helps existing companies upgrade to new technologies to modernize their operations, from $20 million to $40 million. To help eliminate a waiting list of 8,000 people currently seeking more training opportunities, the governor is also proposing an additional $12 million over two years for education programs administered by the Department of Workforce Development.
Other education and workforce development initiatives include increasing tuition by 6% in fiscal year 2024 and 2% in fiscal year 2025 for both K-12 schools and higher education institutions, boosting funding by $6 million annually for the Workforce Ready Grant and supporting the development of a Department of Workforce Unemployment Insurance pilot program that incentivizes recipients to complete their diploma or equivalency.
Holcomb is also proposing to spend $160 million annually to fully fund the cost of textbooks and other curriculum materials for students at all traditional public and charter schools and eligible students in non-public schools.
Citing cost increases due to record levels of inflation, Holcomb is also asking for $1.25 billion in the current fiscal year to complete four capital projects, including the new Westville Correctional Facility, the new state archives building, co-location of state’s blind and deaf schools, and a new inn at Potato Creek State Park.
Click here to view a breakdown of Holcomb’s agenda priorities
It’s unclear whether state lawmakers will include some or all of the governor’s funding requests in their biennial budget. Republican leadership has been reticent to commit funding to the governor’s initiatives, citing a projected economic downturn early next year and the need to pay down the pre-96 Teachers’ Retirement Fund account, while Democrats have said the state should leverage its strong fiscal standing to make improvements to public health, education and workforce development.
The governor will Thursday formally present his two-year, $43 billion budget proposal, which comes with $5.5 billion in new and increased spending. During the news conference, Holcomb addressed questions of spending amid economic concerns.
“We’ll be mindful not to spend more than we have,” he said. “This budget…does not do that. In fact, it’s leaving 14.4% in reserves, and that’s by design. That’s for a couple reasons. We know there are some other areas that we could grow, and we know that there are some issues that the legislature, with all due respect, are going to put forward in the next week or so as well. There are some good ideas out there, and I wanted to leave room to be supportive of those efforts as well as they come together.”
The 2023 session begins Jan. 9, and lawmakers have until April 29 to adopt a biennial budget.
Senate President Pro Tempore Rod Bray, R-Martinsville, said Senate Republicans share a number of the governor’s priorities for 2023.
“Above all, we will seek to pass a balanced budget that funds the needs of Hoosiers,” he said. “We share the governor’s goals of improving our public and mental health infrastructure and providing new funding to that end, as well as paying down the pre-1996 Teachers’ Retirement Fund, supporting law enforcement and continuing to fully fund the state’s K-12 public education.”
House Democratic Leader Phil GiaQuinta of Fort Wayne also released a statement following the release of the agenda.
“From eliminating textbook fees to making historic investments in public health, Democrats and Gov. Holcomb are on the same page and I’m glad to see support for the ideas we’ve championed for years,” he said. “But I’m afraid the real question is whether Statehouse Republicans are as forward-thinking as Statehouse Democrats and the governor.”