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The House Ways and Means Committee on Thursday unanimously advanced a Republican leadership priority bill offering public retirees a bump in benefits.
Lawmakers also heard testimony on legislation that would extend a cap — worth $87 million — on school operating referendum levies for another year.
House Bill 1004 author Rep. Bob Cherry said that thousands of former employees make just $800 a month, and some only $200 a month.
His bill would offer a 13th check between $150 and $450 to public retirees — teachers, former state employees and others — based on years of service. Dedicated funding in separate accounts already exists to cover the estimated $33 million cost.
State police would be eligible for a 1% share of the maximum pension for a trooper with certain years of service, paid from the budget-funded State Police Pension Trust Fund. That’s expected to cost about $400,000, according to a state fiscal analysis.
About 88,000 Hoosiers across the funds would get a supplement to retirement benefits that don’t keep up with inflation.
Representatives for public educators and other retirees spoke in favor of the measure, along with union advocates.
The committee approved the measure 23-0. It will next be heard on the House floor. But it already — again — faces an uncertain road in the Senate.
Lawmakers in that chamber have been hesitant to authorize another ad hoc benefit bonus before a two-year task force concludes its work. That body recently recommended that Indiana move to a long-term, mixed approach.
Senate President Pro Tem Rodric Bray, R-Martinsville, said Thursday that his caucus had learned “a lot” from the task force and is looking at a different approach than the House.
Legislation from task force chair Sen. Brian Buchanan, R-Lebanon, would require the Indiana Public Retirement System board to develop the capability to pay members of certain funds by category: one group would get a 13th check and the other a 1% COLA.
Who gets what? Senate Bill 275 says the General Assembly would set the “to be determined” cutoff date dividing the two groups. The bill requires the board to set surcharge rates to pre-fund those bonuses.
“We’ll have a serious conversation about that. I can’t tell you where we’ll land,” Bray told reporters.
School levy cap draws fire — but no vote
The committee also heard testimony from worried schools and supportive fiscal experts on legislation extending a cap on school operating referendum levies.
Chair and author Rep. Jeff Thompson said that nobody could have predicted the growth in assessed value — which increases the amount of money collected — back when pre-2023 referenda were on the ballot.
He said House Bill 1120 is a “decrease in the increase” that schools would get. And he clarified that the decrease is based off the maximum levy to avoid penalizing “frugal” school corporations. They can choose to levy at a rate below the one voters approve or extend.
A fiscal analysis shows that 61 school corporations with 62 operating referendum levies would max out their levies at $86.7 million less than what they would receive without the cap.
That also means property owners will save that amount.
The biggest losers would be Indianapolis Public Schools, with a loss of $12.5 million, and Carmel Clay Schools, with a loss of $8 million. An additional 21 school corporations could miss out on at least $1 million each.
Westfield Washington School executive Brian Carmichael called his school corporation one of the fastest-growing schools in the state. He said it gained 520 students in the last year, which came with an 8% increase in cost.
Former Rep. Tony Cook, now the executive director of the Indiana Coalition for Growing and Suburban Schools, said the bill “handicaps the ongoing success” of schools like Carmichael’s.
Indianapolis Democrat Greg Porter additionally asked to not penalize “mature” districts that aren’t growing — but still have significant needs for which voters have approved funding.
As education finance expert Denny Costerison testified in opposition to the bill, Cherry cautioned that assessed values are variable and can easily decrease — in turn lowering the amount schools get through their levies.
“We can’t get you used to spending all that,” Cherry said.
David Ober, from the Indiana Chamber of Commerce, supported the measure because when assessed value grows so much, “there’s a windfall that’s captured.” He said lawmakers should get to decide how that’s handled.
But, he suggested that referenda going forward include projections of how much money could be collected across the lifetime of a levy, instead of just the rate.
Voters, Ober said, “should know what they’re voting for.”
The committee didn’t vote on the bill. Thompson said he was working on an amendment that could limit levy growth in some other fashion.
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