the Indiana General Assembly has officially concluded its session with changes to the budget including additional funding for K-12 education and several priority bills to be voted on.

Lawmakers worked into the early morning hours on Friday bills that passed the legislature now head to the governor for his signature or veto.

>> Now if the governor neither signs nor vetoes a bill then it will become law without his signature after seven days.

Well, tonight on prime time we're going to bring you the first of two programs reviewing the General Assembly's recent session.

>> Good evening, members Heinsohn.

Let's get going with number one because with us tonight are Nikki Kelley, editor in chief with Indiana Capital Chronicle.

Brandon Smith is with us.

He is statehouse bureau chief for Indiana Public Broadcasting and host of Indiana Week in Review which you can see Sundays at five thirty PM here on PBS Fort Wayne and Michael Wolff is with us.

>> He's chair and professor of Political Science and acting director at the Mixdown Center for Indiana Politics at Purdue Fort Wayne .

>> And you're here too and we invite you to join the conversation.

Just call in your comments and questions by using the number on your screen as we widen out indeed and welcome everybody virtually and inreality there's Mike right next to us and on your screen top left there's Brandon and Nikki down below.

Thank you both very much for being a part of this.

>> We appreciate it.

Thanks for having us.

Absolutely.

And it's good to catch you while you're still conscious.

I do think it's fair to start with this that this was a long day's journey into night or maybe what a long and short night both at the same time for all the activity that was still going on.

I suppose it's perhaps a positive that when you're getting ready to wrap up a session like this the chambers don't have windows so you don't see how dark or light you the passing of time may be.

>> Perhaps you can both rewind the collective tape for us and start with this.

>> What was it that led to this 12th hour K-12 spending boost that caused the budget to be opened up in the first place thinking when we start with you ?

>> Yeah, it started I think late Wednesday night after the leaders had unveiled this agreement they had and everyone was going to be on board and are going to vote on it on Thursday and finish the session.

But in caucus Senate Republicans especially we're hearing from their school districts back home that when you looked at the what we call the school run obviously when you give a pot of money to each district there's an average but within there is a lot of flux on how each district receives the money.

And so a lot of these districts were barely any increase in the first year and very little in the second year.

And so there was some confusion about how this large voucher expansion was playing into the school run formula and so basically some rank and file members forced some change and the only way to fix that is to put some more money into the formula and that's what they did.

They found an extra three hundred million on Thursday.

>> Brandon, the the they found that extra money from a place already earmarked for paying down student or teacher pension obligations, I believe.

>> But they were able to keep the wheels of progress turning.

What was your perspective this was all going down?

>> Well, I mean first it was nothing was official for a really long time the legislative leaders were really keeping it to themselves even from their own members for a long time.

>> And so the rumor mill of course started at the statehouse in the hallways as it does as we started to learn what the actual problem is Nikki just discussed I will note that I think it is particularly notable where they did find that money which is Senate Republicans raised this issue said hey, there's not enough money here for our school districts and so it does appear as if the House Republicans said to them, well, if you want the money you've got to go find it because paying down that pension debt Indiana has been paying down that pension debt for a long time and it is scheduled to continue to do so for the next few years.

But the Senate Republicans have been I would say almost obsessed with paying down more of it faster and that was there was a billion dollars in this new budget to do that and that's where they had to get the money from instead of say dipping slightly into the reserves which would have affected very little in a budget quite frankly.

So I think it was notable that House Republicans got Senate Republicans to solve their own problem and by at the time they reach that that bottom line the time on the clock was what, a little bit before 3:00 in the morning or thereabouts?

Yeah, the Senate the Senate officially adjourned signi die at two forty seven a.m. And Mike, as you're watching this perhaps with a cup of coffee monitoring the morning after from that that night before, what's occurring to you from a political science perspective?

>> Well professors and students are never late and stuff either so of course that we're all new to me but you what really struck me this year is this was done in a budget that really as you know, an access imagine the politics of this had we been in deficit or something like that and I think that's important for us to remember as long as well as Indiana's modern professional legislature.

So this is, you know, a session that's a long session for us other states around fiscal year round.

And so the pressure for them to come up with this legislative package in a budget and everything else is packed really intense.

And so it's you know, kind of Hercule, an effort to even get done as they did last night.

And I was also interested in kind of the way in this case in particular how the local school districts really had an effect and bounced back and had them head back in to change the legislation.

That's a big deal that and good for them actually that they're listening to the localities but also the interest group politics this year were very strange because in this one clearly made a huge impact on the ultimate legislation that came out.

But on other issues that we could talk about interest group politics really was different.

And so it's, you know, a very unique year when you consider the politics surrounding everything and we didn't even have a whole lot of cultural issues that kind of swept down .

And this is important when you think of Indiana as a state that's dominated by the Republican Party right now there's not uncommon in the US we have thirty nine states where, you know, one party controls the two chambers and the governorship.

So the fact that the politics and we still had division within the Republican it was interesting to watch in the long term as well.

>> I want to get everyone's take on this one because at one point you had the chair of Senate Appropriations Committee saying no more money for vouchers.

I want to be sure that there's appropriate oversight and on the House side the bill was moving from that chamber to the Senate fully loaded and then the revenue report comes through and seems to almost double the December projection top all that off by House Speaker Todd Houston saying that Indiana is on its way to becoming the best school choice program in the country and I think it's the first time that I've actually heard that terminology in a complete sentence.

So go with this wherever you like.

Nikki, let me start with you on the whole impact of the word voucher on the process of budget building.

>> Yeah, I mean they obviously put money into traditional K-12 public schools but the real money went to voucher expansion basically.

Now anyone in a family of four making less than two hundred thousand dollars can get state paid private education and they estimate from the advocates is that less than four percent of the state aren't eligible for vouchers.

So for all intents and purposes it is universal vouchers and for Democrats and opponents, you know, they see where this program was started under a very specific guise of we're helping kids trapped in failing schools and in poverty and now it's just not that anymore.

>> It is just, you know, full blown school choice.

So how about you, sir?

>> What we've seen I mean the school voucher program was created really first by House Republicans in 2011 and it's grown exponentially ever since as House Republicans in particular have pushed it to grow more and more and more.

>> Nickie's right.

We're we're pretty much at Universal vouchers at this point because not only did they increase the the income eligibility, they also importantly got rid of the pathways.

So these were sort of guidelines that families also had to meet.

So in addition to being income eligible, the most common pathway was you had to have the student had to spend at least a year in a public school or have a sibling who spent a year in a public school and now those are completely on.

So there is no guardrails whatsoever at some point this reaches a critical mass.

Right, because we've seen dramatic funding increases for K-12 education the last two budget cycles really and and then this one again.

But vouchers by far eating up the biggest percentage of that increase.

>> Well, at some point you have to assume the voucher program kind of starts to reach a limit if only because there are only so many private schools in the state theoretically but we're not there yet.

So for the foreseeable future because we're not going backwards for the foreseeable future, whatever increases to K-12 education overall vouchers are still going to be eating up quite a lot of it.

>> And yeah, I wanted to follow one quick thing looking at the run and the idea of these are not kids who have been to public school before.

>> It's estimated thirty thousand new students will enter the voucher program next year because of this change and all of that.

So when you think of oh, they added one point five billion but they also are adding 30000 thousand kids and with teacher shortages with complaints about teacher pay in particular, they also potentially pass.

And we'll see what happens here with the issue of bargaining and the lack of ability of teachers to bargain within classroom curriculum and other things relative to school administration.

So there's more politics and thicker politics going on.

>> Even behind that we can do more than likely a whole half hour based on education alone.

Lots of takeaways from additional funding going in for the on my way pre-K program for 21st century scholars and additional enrollments in that sense.

>> But wondering about this dynamic too.

You had interest in reducing income tax with the House measure initially saying we want to get there, you know, by somewhere over the next three years to get down to a minimal number.

Senate is looking at the passage of and did in fact create the task force to look at a holistic approach apparently to taxes in Indiana .

>> And yet in conference we came back out sort of a different split while retaining the task force.

But we we've added an extra year but we're still looking to reduce income tax.

I'm wondering what your take is on that.

Brandon, let me start with you and for that matter what this might mean for a future biennium.

>> Well, I think a little continues the theme certainly by the end of session not just on the budget but on other bills the House Republicans kind of steamrolled the Senate or at least seemed to on so many issues this being one of them.

So it isn't just that they're going to cut the income tax faster than the bill that they passed last year was going to do.

It's also that they got rid of the guardrails within that similar to what just talked about with the voucher program here the the the reductions in the income tax we're going to be triggered by I think at least two percent growth in state revenues.

So every budget cycle if state revenues grew by at least two percent, OK now the income tax cut can go down a little bit more and the Senate Republicans theory on that was well in case there's an economic slowdown, we don't want to be cutting taxes when we're struggling for revenue.

What the House just got rid of that and the Senate went along with it.

So and then the tax commission I think it's a worthwhile effort to look at the whole picture and say what is the best approach to taxation in the state of Indiana?

But so far Senate Republicans have sort of focused on the idea of trying to completely eliminate the income tax entirely and House Republicans who are happy to cut it right now are saying well that's like eight billion dollars a year.

I'm not sure how we're going to do that.

So it'll be really interesting to see how that plays out over the next couple of years.

>> Nikki?

Yeah, I mean I think Brandon covered that topic pretty well.

There was a whole nother tax issue that was being discussed about these property tax increases and in the end I mean it seems like lawmakers they did a few things that maybe might bring 100 hundred million dollars worth of relief next year to taxpayers.

But it seems like they basically said look, we're not in charge of those these are local units of government and this is funding running local government services and we're not a place for you to bring your complaints as kind of the feeling I got.

>> Yeah, and it works out really well when you're sixty five and older.

So there's one positive pick for the aging gracefully.

>> Mike, what about you?

I just you know, again, as Brandon mentioned here, you know when the budget's big in the budget projections come in late and show even greater that it makes the guardrails that were, you know, thought to be put in there less susceptible to the politics.

And so it's not a surprise that they end up happening.

But you know, this is a sometimes it's not great to make policy when the budget is so thick, you know, without those guardrails attached.

So I think in the long term there's be some soul searching and thinking about that.

>> Yeah, Brandon, Governor Holcomb says that he will be very he'll be glad to sign this generational impact budget, he says with policies and plans that can be viewed as a blueprint for growth.

How close did the legislature come to incorporating the governor's budget proposal ideas?

>> There was a healthy amount in there that the governor really wanted maybe not all the way to the level that the governor wanted on some things but he got a lot of what he wanted more than I've seen in past gubernatorial budgets by the finish line and a lot of the focus understandably has been on Public Health Commission recommendation and the governor pushing for a dramatic expansion of what local public health departments do there is money two hundred twenty five million dollars over the biennium for that.

But I'll I'll note the Indiana Economic Development Corporation got more than a billion dollars in this new budget with very little guardrails and oversight.

>> I will add much to the grumbling of some Republicans quite frankly to go out there and trying to attract businesses to the state of Indiana.

>> There's hundreds a million dollars for a deal closing fund.

Who knows what they will honestly use that for because it's not really defined in state law in the state budget there's money for site selection so similar to what they're doing in Lebanon, Indiana where they're just buying up a bunch of land and getting it ready for someone to hopefully move into it.

So as well as more efforts to just attract businesses and what the governor talks about and other leaders talk about is there's a sense that that we're in a moment in time where there are industries that are the future of batteries, some agro biosciences stuff, things like that that now is the time when we are going to be able to attract those companies and so we have to give our economic development corporation every tool possible in order to to make that happen.

>> So yeah, Nikki, I notice too that I think almost half of the priority bills in each chamber had health care or some aspect of health connected to it so that the governor's blueprint on mental health and related to public health across the county's how do you feel the budget passed that matches up with what the governor's wish list included?

>> Yeah, I think he got much of what he wanted it on public health that there might be a few complaints about not spending quite enough on the mental health component as they hoped they put in about 50 million dollars annually.

Advocates had hoped for more like one hundred million hundred thirty million annually in terms of health care costs.

>> The Senate especially went kind of strong in trying to control health care costs from ,you know, the prescription drugs side side of service hospitals, things like that.

They did pass bills.

Many of them were watered down last night and final negotiations there's a lot of data and studying that's going to go on but definitely not as aggressive as the bill started out earlier this session.

>> And Mike Lee, political science putting its grid over all this when the executive branch goes to the legislative branch this feels much like a win.

>> Yeah, well, I think this classic agenda setting I think the governor was looked at the budget situation he really pitched in the state of the state this idea of talent acquisition, quality of life and these other things and then put the policies in line with them and really set the agenda for the Nickey and Brandon are talking about the legislation that did pass.

So I think the clarity he didn't spend a whole lot of time talking about the cultural issues he's kind of taking from the the process in other states, you know, kind of distracting.

He was very clear and I think that's what drove kind of the the budgetary process was impressive in that sense of really kind of driving.

It's easy to do when you have Republicans in both chambers but now easy to do with some of the divisions that we saw earlier in the session and we have time enough to turn quickly to this notion of under the heading of it's never over till it's over in the final hours lawmakers resurrected a much debated ban on materials that were deemed obscene or harmful to minors.

They moved the language from Senate Bill 12 to plug it into House bill fourteen forty seven .

Let me start with Nikki on this one.

This this is truly one of those it's not a dead issue till the bell rings, I guess.

>> Yeah, as long as language has passed one chamber it's eligible for conference committee and this had been discussed in both chambers though the House had not actually voted on it in committee.

So in the end they did something and you know, we've been talking about this issue for three years now I think and they came together on something that I don't think will please advocates quite as much.

It focuses only on sexually explicit things.

It doesn't get into the issues of violence and race and things like that and it uses some pretty high bar of language in state statute.

I read already about obscenity and when something is harmful to minors so earlier the Senate had had proposed more of looking at just inappropriate books which of course is very wide and subjective and so it sets up a process and of course libraries and it only affects school libraries, not public libraries.

Of course libraries have processes if you want to challenge a book but some people have said well they don't respond or so this makes them respond in a public meeting, things like that.

So it does set up some process to challenge books and it takes away a key defense and educational defense for anyone if a prosecutor would want to charge someone it is a felony.

But again I do point to the actual statutes which take a book as a whole and not small passages and so I don't think that will be happening too much but it could have a chilling effect.

>> We're it seems this is the process of politics that we will often hear about but try to think of an example of when it's actually in motion and and here with this legislation this is a way to keep some issues alive all the way to the final hour.

>> Well, I mean talking about this issue specifically, it matters a lot to what seems like a relatively small group of people but nonetheless who are very loud, very vocal and potentially influential in Republican primaries.

And when you have an overwhelmingly Republican state, the only real races in most state House districts are in primaries whether that's on the Republican or Democratic side in particularly blue seats.

So this clearly matters to some Republican lawmakers who are either passionate about the issue themselves or worried about a primary challenge from someone who is.

So I think that's that's partly what drove this.

I agree with Nikki.

I don't think the people who were pushing for this language will be particularly happy with it at the end of the day.

>> But I mean this is three years just to get this at the last second after a lot of back and forth, I don't know if they can get more in the future.

>> And again, as you're watching this play out, it's just interesting that the unique nature of this he talked about is the educational protection against prosecution .

Is that what kind of precedent this is set for ?

You know, that aspect that's kind of unique.

That's only like Iowa, another state that have that.

So there's a lot of book stuff going around the country but only this this is kind of unique an important kind of component in talk to me briefly about the idea that two politics can be perhaps a long game as well as a short game.

We have several years and in related to this legislation alone, the designated outdoor refreshment area bill that has finally seen a happy ending has also been several years in incubation and the classic one I would close with Jean icings Bill on cursive handwriting or cursive writing rather we don't want to be redundant.

>> It finally passes.

I'm not sure how long of a journey that one's had.

It's hard to get things on the agenda and a lot of times you just as mentioned as they mentioned, you've got to keep pushing and pushing and then it reappears.

So it's not a surprise that these are taking a while to get through again in a nonprofessional legislative session.

>> So and Nikki and Brandon, you each have 30 seconds apiece to talk about that or or any other thing that occurs to you as we take this final look.

>> Yeah, I just wanted to say obviously a lot of stuff moved through last night.

We're probably still going to realize some of the stuff in the next couple of weeks that got kind of slipped in in terms of her sobriety.

I'm just going to note still not a requirement.

>> All it does is gather information about which schools teach it in which schools don't .

>> Branton, you I'll just say that exactly right that we see so many issues year after year that take years to finally reach the finish line whether in complete or half form.

And so if there's an issue you're passionate about and it didn't make it to the finish line this year, come back next year because there's a real chance it'll it'll be back.

>> Case in point and thank you all for filling this hypo.

And you're right we've only just begun to unpack these past months.

Nikki Kelley is editor in chief with Indiana Capital Chronicle.

Brandon Smith, statehouse bureau chief for Indiana Public Broadcasting, host of Indiana Week in Review seen on this very TV station and next to me Mike Wolfe, chair and professor of political science, acting director of the Mike Down Center for Indiana Politics at Purdue Fort Wayne .

>> Thank you, sir.

Thank you, ma'am.

Thank you, gentlemen.

And for all of us with prime time, I'm Chris Haynes.

Thank you for allowing us to be a part of your night.

Take care.

We'll see you soon.

Good night