Area state legislators update local residents on state budget, local income taxes, closure of capitol

At a forum hosted Saturday morning by the League of Women Voters Bloomington-Monroe and the Greater Bloomington Chamber of Commerce, three state legislators gave an update after two weeks of this year’s session.

Screen shot of the Jan. 16, 2021 forum co-sponsored by the League of Women Voters and the Greater Bloomington Chamber of Commerce. Clockwise from upper right: Ann Birch (president of the LWV of Bloomington-Monroe, Matt Pierce (representing District 61 in the state house), Peggy Mayfield (representing District 60 in the state house), and Shelli Yoder (representing District 40 in the state senate.) (Image links to CATS recording of the forum)

Any partisan jostling that unfolded between the two Democrats and one Republican who attended was relatively mild.

In their opening remarks, and in their responses to the questions from the public, they covered a range of topics, including the budget, teacher pay, local income tax, and next week’s capitol closure, among others.

Matt Pierce, a Democrat representing District 61 in the state House, used his opening remarks to talk about the budget. Indiana’s legislature adopts a budget every two years, and that cycle makes 2021 a budget year.

Pierce said, “It’s interesting that the governor and his proposal seems to be focusing mostly on buildings and infrastructure.” Pierce said the Democrats would be taking a different approach from that of Republican governor Eric Holcomb.

Pierce said, “We think that particularly at a time when so many people are struggling, we should be maybe focusing the resources we have more on people—people infrastructure, human capital, and particularly those who are struggling at the bottom.”

Pierce added, “It seems like we do a very good job of stockpiling the surplus, but even when it’s raining, and you might want to use a rainy day fund, seems like we still kind of hang on to that money.”

Following Pierce was Peggy Mayfield, a Republican representing District 60 in the state house. Mayfield took up the topic of the surplus by saying, “Because Indiana has been so disciplined over the last decade…, we have money now to continue to invest in Indiana, instead of figuring out how we’re going to pay our bills coming out of this pandemic.”

About the budget adopted two years ago, Mayfield said, “There were more than 40 amendments from the Democrat caucus—not all of them were offered. But the ones that were offered totaled up to like $1.6 billion, beyond what was what was being proposed in the bill itself.”

If all the amendments offered by Democrats had passed, Mayfield said, “All of our surplus would be gone right now, and the state would be broke again.” She added, “As much as I hate to say no to people, we have to be disciplined in that respect.”

Next up in her opening remarks was Shelli Yoder, a Democrat representing District 40 in the state senate. Yoder took up Pierce’s point about using rainy day funds when it’s raining: “I really appreciate Representative Pierce mentioning that even when it’s raining, not being able to utilize those funds.”

Yoder gave teacher salaries as an example: “Income inequality in Indiana is getting greater and greater. And when we have that money in reserves, yet we continue to sort of kick the can down the road—in paying our teachers a salary that reflects that they are professionals.”

Yoder said she is encouraged by some of the talk she’s heard from Republicans: “I am encouraged that I hear my Republican colleagues say that this, too, is a priority for them, making sure that our public schools are fully funded, and giving our teachers the wage increase that they deserve.”

Yoder put the amount that could be accomplished in this year’s session in the context of the fact that it’s a budget year, and the focus will be on passing the two-year budget. Each senator is allowed to file 10 bills, Yoder said.

Adding to the crunch, Yoder said, is the fact that the state capitol will be closed next week, in light of Wednesday’s presidential inauguration, because of security concerns.

The storming of the nation’s capitol a week and a half ago by pro-Trump rioters, during the counting of the Electoral College votes, has heightened a concern for security at governmental facilities across the country. Next week, Yoder said, “There will be no session, no committee meetings.”

Yoder added, “So I just wanted to let people know that I appreciate the caution that the state police have put into this as well as the majority party, the leadership and the Republicans.”

State legislators fielded a question from the audience about Indiana’s preparedness for a scenario like the one in Michigan, where people with guns entered that state capitol.

Mayfield said she hasn’t been involved in those discussions, and she defers to the state police for those decisions. So far, Mayfield said, “There’s not been any sort of direct threat aimed at the state capitol. It’s merely the location of rallies.” Mayfield added, “But you know, there’s always that possibility that you’re going to have some knuckleheads that take it over the top.”

Pierce said some members of the Democratic Party’s caucus had requested a meeting with the head of state police to find out exactly what they were going to do, which had evolved into a meeting with all the legislative leaders. Something about the information discussed at the meeting appears to have caused a change in plans.

Pierce said, “Going into the meeting, we were going to be meeting pretty much as usual next week, and have committees working on Inauguration Day. And coming out of that meeting, everything was canceled for a week.”

Pierce said the explanation is along the lines of “having an abundance of caution.” He added that lawmakers don’t necessarily have the specific details of the situation. Pierce said, “I think part of it is that law enforcement does not really want to share the details of what they’re doing with us, because legislators are very bad at keeping secrets.” Pierce added, “They don’t want potential insurgents to know what their lines of defenses are that they’re creating.”

One topic of interest to Bloomington residents does not yet appear to have any bills filed about it.

Last year, the legislature revised the way that votes get allocated on the local income tax council, so that fractions of votes are allocated to each person who’s a member of a body, not to the blocs of the individual governing bodies. But this was set to expire in May of this year. That set up an expectation that the issue might get some further attention in this year’s legislative session.

Responding to a question about possible local income tax reform, Mayfield said “There are at least four concepts that are being discussed on the House side. And I know one of at least one on the Senate side.” She did not know if any of those concepts have been drafted into language for an actual bill. On the Republican side, any bill would come through Representative Jeff Thompson, she said.

Even if a bill on the subject were to be introduced, Mayfield said, given the disruptions to the schedule, “It’s very possible that it might not make it to the finish line.” About the May expiration for the revision made last year, Mayfield said, “I suppose the last ditch effort would be to extend the deadline.”

Pierce responded by sketching out the typical process for how such a bill might get constructed, “Rarely are there a bunch of standalone bills. Usually, you have one bill, which starts out with maybe 10 provisions in it. And then by the time it comes out of committee, it’s got 20 provisions in it. By the time it gets through the Senate, it’s got 30 provisions in it. And then by the time it finishes in conference committee, it’s got 40 provisions in it.”

Pierce said he thinks at some point the Republicans are going to decide what they want to do on the local income tax issue. “They will probably put in an amendment in committee, would be my guess,” Pierce said.

Moving from the process to the substance of the issue, Pierce said. One approach is to change the mechanics of the weighting of the votes, Pierce said. A different approach, which would be his own preference, would be to “decouple all these local units of government to allow them to create the taxes within their jurisdictions that they think their constituents will support and not have an impact on others.”

In the case of Monroe County and Bloomington, there’s no possibility under current state code for a local income tax to be levied just on Bloomington residents. State law is currently set up to allow only for a countywide tax. Because Bloomington’s city council will have a greater weight—whether the votes are allocated in a bloc or to individual members—Bloomington’s elected representatives could wind up deciding a local income tax for the entire county.

Pierce’s preferred approach would allow for Bloomington to impose an extra local income tax just on Bloomington residents.

The issue of who decides the local income tax was a part of the debate last year on a proposed increase that wound up getting voted down by the Bloomington city council.

The LWV and Greater Bloomington Chamber of Commerce will be hosting additional updates from state legislators in February, March and April.