Team Braun details priorities, policy proposals, implementation
Governor-elect Mike Braun (R) sheds some additional light on his administrative and policy priorities this week, eager to put wins on the board as quickly as possible out of the gates, even via executive orders that can take effect for the most immediate action before he can fully synchronize his priorities and policy proposals with Republican legislative leaders.
The Braun agenda – much of which he spoke about and elaborated on along the campaign trail – combines executive action, legislative initiatives, and agency-level reforms to achieve these policy goals. You should think of this not as a purely legislative agenda but a broader program that recognizes that the incoming administration can accomplish its objectives in a number of ways.
Look for his previously announced cabinet leadership model to roll out via executive action on Day One . . . and to have a firm idea by then what can be accomplished via executive action or agency protocol, and what will require partnership with and support of the legislature to accomplish. Regardless, you should not view this from an adversarial perspective. The Braun Administration is entering office with a mindset to determine the quickest and most practical opportunity to achieve the desired change. This will not be an approach under which the administration will try to see what it can win from the legislature, and if it doesn’t get it, it will then turn to executive action . . . but rather one based on expediency and collaboration.
While it may seem like the Governor-elect is making a big early jump with his plans, if you look back 20 years, then-Gov.-elect Mitch Daniels (R) had already effectively coopted lawmakers by Thanksgiving. He convinced leadership to commit to pre-Christmas property tax reform hearings to advance his agenda.
That surprise substantive early kickoff caused lots of grumbling from solons and those in the hallways who had become accustomed to taking time off between the election and the January traditional start of session . . . and established a tone of nonstop activity for the next eight years (and also the post-election 2008 period, which suddenly became more active because of the early concern over the expected impact on Indiana of the global fiscal crisis).
By contrast, the Pence and Holcomb transitions were much more traditional slow rolls of sorts, although both governors often used the annual mid-December Dentons Legislative Conference in association with Hannah News Service as a vehicle for rolling out key policy initiatives (such as the Pence state education makeover) and even the basic shape of the legislative agenda (as you saw several times during the Holcomb Administration, although the governor typically held back a big surprise initiative for his State of the State address).
By the end of next week, you should have more detail on the bulk of names of cabinet officials, with the key spots (based upon the old rubric) being the director of the Office of Management and Budget, the secretary of the Family and Social Services Administration, and the secretary of commerce/president of the Indiana Economic Development Corporation.
Lisa Hershman of Buck Creek, the first chief management officer of the U.S. Department of Defense – making her the third highest-ranking Pentagon official from 2018 to 2021 – assumes the newly high-profile OMB post.
A former telecom executive and consultant, Hershman, the wife of Bose Public Affairs Group lobbyist Brandt Hershman (a former Senate majority floor leader), has successfully managed an entity even larger than the State of Indiana, introducing fiscal, performance, and evaluation standards into an unwieldy hierarchical bureaucracy. At the Pentagon, Hershman, a former member of the Indiana Commission for Higher Education (2014 to 2020), managed a $168 billion budget, and achieved record-setting savings of $37 billion through operational reforms. She led the completion of DoD’s first unified budget, merging 28 organizational budgets while implementing a customized approach based on mission and purpose.
The early Braun agenda prioritizes five areas . . . although you should bear in mind three things: (1) Many of his priorities are aspirational, and not laden with specifics – a vacuum of sorts that will allow legislators to help shape the path; (2) New governors invariably are tested by the lobby and even their own legislative leadership early on in the process, and how they react sets the tenor for the next biennium; and (3) Unanticipated wrinkles typically arise – be it a natural disaster, an unexpected fiscal problem, a high-profile incident that grabs the public eye, or even an oversight or slight – that can suck the oxygen out of the State House and change the environment.
With those caveats, the initial 40,000-foot view policy priorities of the incoming administration focus on tax relief, government efficiency, economic development, healthcare, and quality of life issues. Here’s how Team Braun broadly frames it:
(1) Providing tax relief to address inflation and reduce the burden for everyday Hoosiers.
(2) Delivering a leaner, more responsive government that runs efficiently and provides excellent constituent services.
(3) Equipping Indiana’s next generation through education, workforce development, and economic development.
(4) Investing in a healthier Indiana by driving down healthcare costs, increasing access, and increasing transparency.
(5) Improving quality of life for every Hoosier through public safety, affordable energy, and clean water.
Historic Tax Relief for Hoosier Families
Gov-elect Braun seeks “comprehensive tax relief that protects taxpayers from runaway property taxes, supports retirees and families with targeted relief, and reduces the burden on Main Street businesses,” as his agenda explains.
He looks to a “cap and cut” approach on property taxes, with lots of leeway for lawmakers to shape the package with only a few constraints. The Braun Administration wants to cap annual property tax increases at two to three percent for homeowners and farmers, and cut property taxes by resetting homeowner bills to their pre-Covid levels.
There’s purposely not a lot of detail offered here, because it appears that the effort is aimed at restoring property tax bills to what they were before the recent rapid increase in assessed value, as opposed to returning things to specific years. That’s because of a number of factors, including, for example, increases due to referenda or the loss of tax-producing property.
The Braun team understands that there will be a significant detrimental impact on revenue for local units of government from any substantial property tax relief measures. A dialogue on how to mitigate that not only has yet to open with local governments, but those local units must also understand that the Braun team views the taxpayer – and not the tax collector – as the primary focus, and wants to ensure that residential and agricultural property taxpayers feel immediate relief as a result, with, apparently, only a secondary concern for how local units can recoup shortfalls.
The Braun tax agenda also would require legislative support to eliminate state tax on retirement income including pensions, 401(k)s, and IRA distributions . . . create tax-advantaged Farm Savings Accounts to help stabilize farm income . . . institute strategic sales tax holidays for back-to-school supplies, outdoor recreation equipment, and youth sports gear . . . and update the farmland base rate formula to provide targeted relief for agricultural communities.
The Braun team is encouraged that lawmakers are focused on reform, and specifically on property tax reform, which constituents seem to be telling them – with varying degrees of urgency – needs to be accomplished during this session. Expect the homeowner component above all to be something that the Governor-elect will push hard to drive that discussion. At the same time, however, Senate Committee on Tax and Fiscal Policy Chair Travis Holdman (R), who co-chaired the two-year study of state tax reform undertaken by the State and Local Tax Review Task Force, believes that “The complexity of this system cannot be fixed to provide overnight relief to any one classification of taxpayer. The process requires a multiyear effort to ease into a reform,” adds the 16-year legislative veteran.
House Committee on Ways and Means Chair Jeff Thompson (R), the other co-chair of the State and Local Tax Review Task Force, also suggests that if any tax law change is enacted in 2025, it will likely be incremental and not immediate, with the financial impact spread over several years to avoid property tax-reliant local governments being forced to curb essential services.
Streamlined, Responsive Government
To reduce waste and improve the delivery of essential services, the Braun Administration will develop “strict performance metrics for its agencies, and eliminate unnecessary or underperforming positions and programs.”
Streamlining state government is envisioned by Team Braun as helping them to keep the budget under control, and finding opportunities to fund other priorities.
Note the difference between how the Braun transition effort differs from the national Trump transition in this respect. at the Vivek Ramaswamy, who will be co-chairing the federal Department of Government Efficiency (DOGE) with Elon Musk “mainly wants to find ways to shrink the federal government’s power. The savings that would generate are secondary, Ramaswamy [tells Axios’ Mike Allen during an interview] onstage [Wednes]day at the Aspen Security Forum.”
The transition team has been talking to every department and agency head, many of whom have indicated they would like to stay in place in the new administration. If a top official wants to remain, Braun transition officials are evaluating the performance of that agency, but regardless, all are being asked for evaluations of agency mission, functions, operations, staffing, rules and regulations, and interfaces with constituencies. The team expects to begin the new administration with significant continuity in departments and agencies. The agenda will include conducting a “systematic review to eliminate outdated regulations and reduce administrative burden.”
More specifically, in addition to the November headline under which state leadership will be consolidated into eight cabinet-level secretaries to improve efficiency, the new administration pledges to present a balanced budget that addresses the looming deficit while “reforming Medicaid spending.”
The Braun team also will launch what it labels as a “comprehensive digital transformation of state services,” including: automated veteran healthcare eligibility verification; streamlined BMV document processing; and a one-stop online portal for farmer services.
Education Excellence and Workforce Development
Understanding that “Indiana’s future prosperity depends on educating and developing a skilled workforce ready to take on tomorrow’s challenges,” the Braun Administration expects to implement “universal school choice for all Indiana families regardless of income.”
The new team also expects to increase teacher base pay well beyond where it stands today, and establish performance-based compensation. They understand that Hoosiers want teachers to be paid more – and they privately pointedly note that they do not see this happening in all school districts despite the state spending record amounts of money funding public education in Indiana. The Braun team envisions the state constitutionally being the ultimate authority in that discussion, and looking to take action where that priority is not being delivered on the local level (during mid-2000s tenure of Tony Bennett (R) as state superintendent of public instruction, our Hannah News Service sister newsletter INDIANA EDUCATION INSIGHT raised some eyebrows when it reported that Dr. Bennett’s office – whose chief of staff is now House Speaker Todd Huston (R) – was privately starting to refer to “teachers as state employees”).
While we’ve all heard about assorted aspirational levels of teacher pay (starting teacher pay is up to an average of $40,000, and average teacher pay now tops $60,000), we see the Braun Administration working closely with lawmakers to set levels, much as the Holcomb gubernatorial office did . . . and you should hear a lot more of the old rhetoric contrasting the cost of administrative overhead and spending on facilities versus what is actually being driven down to spending on classroom education.
The Braun team is on board with the legislative majority mindset that ample resources exist to pay teachers more if that becomes a priority for local school districts, but this does not necessarily take into account the new referendum revenue-sharing requirements, nor the new push by the public charter school sector to force traditional public schools to share “regular” local property tax revenue.
The education agenda also includes a plank on enhancement of school safety through a new Office of School Safety, which we tackle in some detail this week in our sister education newsletter, including where this would be housed and why, what its mission will be, and how hardening school buildings is one of those items that diverts funding from classroom teaching.
The new administration also intends to invest in workforce development through an array of disparate ideas, including: (1) creation of the Hoosier Workforce Investment Tax Credit, a new tax credit for companies that invest in higher salaries and training for their workers; (2) a restructured Indiana Economic Development Corporation; (3) enhanced regional collaboration for job creation; and (4) a focus on improved literacy and math outcomes with evidence-based curriculum.
The new team in 206 will be focused on the education and workforce realm to ensure Hoosiers have the opportunity to experience career outcomes derived from all stages of a degree, whether high school, post-high school certificates and credentials, or a four-year degree. Team Braum eyes an education system aligned with workforce opportunities for Hoosiers.
Healthcare Transformation
As rising healthcare costs and limited access to care, particularly in rural areas, continue to challenge Hoosier families and healthcare providers, the new administration plans to tackle the problem with a multi-faceted strategy that it believes will address both costs and healthcare accessibility while promoting innovation in the industry. The Braun team believes strongly that costs in the healthcare arena should be brought down whether the payer is the government or if the payer is an individual or a business. Watch for changes to promote flexibility for the consumer.
The team brings to this battle the attitude that it can continue to deliver the same level of service – and, probably improve service – with the same amount of spend as we have today. That means you should not automatically expect reductions in services as a result of Medicaid reforms. They think they can find efficiency within that space while still delivering what affected Hoosiers rely upon.
The Braun crew is determined to drive down healthcare costs through enhanced price transparency requirements; reformed prior authorization processes; and regulated pharmacy benefit managers.
Rural healthcare access will be expanded through new incentives for rural healthcare facilities; enhanced telehealth coverage; and improved obstetrics access, though this is another area short on specifics and funding.
The new team also promises protection of coverage for pre-existing conditions; creation of a Primary Care Access Revolving Fund to support new medical facilities; and mental health treatment reform to reduce the burden on the criminal justice system.
Some concerns have been evinced about the ability to sustain the 92-county public health funding initiative rolled out in the current budget, but – at least from the top – that funding is favored on the Second Floor. The Braun team finds what the current administration and the Indiana Department of Health have done in that space as very encouraging, and Sen. Braun himself has always been focused on prevention versus remediation. They see opportunity within the current framework and funding in place to drive better outcomes, which will then, in turn, be a key determining factor in helping lower the cost of property taxes.
Enhanced Public Safety
The Braun team emphasizes how national issues such as illegal immigration and the flow of illegal drugs result in a real impact on communities across the state and country in today’s interconnected world. Because of the complexity of modern public safety, the new administration believes that it is imperative that the State supports law enforcement officers in the line of duty, and these factors will be paramount in selecting a new superintendent of the Indiana State Police to replace the Doug Carter, who is retiring after a long ISP career interrupted by two terms as Hamilton County sheriff.
The Braun Administration assures that it will support law enforcement through competitive salary and benefits packages; enhanced training opportunities; protection of qualified immunity (a problematic issue for Braun in the May primary); and establishing non-discretionary minimum bail requirements for violent crimes.
Drug trafficking will be mitigated by strengthened penalties for fentanyl and methamphetamine distribution; “enhanced state police interdiction powers”; and comprehensive prevention and recovery programs.
Addressing criminal gang activities will also be a component of the public safety package.
The State will be committed to working with the incoming presidential administration to partner on efforts to crack down on illegal immigration by enforcing sanctuary city bans; enhancing cooperation with federal authorities; and preparing the Indiana National Guard for potential border support.
Lower Energy Costs for Hoosiers
The Braun Administration tells Hoosiers that after a decade of rising utility costs, it will ensure that the State has enough affordable and reliable electricity to meet the needs of residents and attract new economic development. This will be accomplished via a “comprehensive all-of-the-above energy strategy”; “Cutting red tape”; and developing “next-generation nuclear energy.”
Expect water resources to be part of the energy policy element.
While the Braun Administration will evaluate the regulatory process and bodies that review and approve projects and rate requests, you should not look for the new team to enter office trying to completely overhaul that system –though you should watch spring 2025 appointments to the Indiana Utility Regulatory Commission, as we noted earlier this fall. Rather, those involved in this space appear top be more concentrating more on bringing additional options to the table for utilities. They perceive utilities as having been restricted in what is available for them, offering fewer options to push rates down and keep them there.
One key option eyed by the Braun transition effort seems to be the small modular nuclear reactors (SMRs), which they view as cutting edge technology . . . but not necessarily an option that could be feasibly be brought online within even a two-term Brain governorship. Still, the energy transition council is on board with the principal as this being a vision for the next generation (in both senses of the word!), laying the groundwork to put Indiana in a leadership position for renewable base load generation (note as well that Meta, which is siting data centers in Jeffersonville and Lebanon, is working toward deploying stand-alone Meta-specific SMRs to power its similar projects in other states).
Look for Team Braun to work with lawmakers and industry to build a regulatory framework, facilitate the technological framework, and determine locations where opportunities exit for most effectively deploying SMRs.
Despite the Indiana Utility Regulatory Commission’s recent dismissal of Sen. Braun’s comments over repowering certain AES resources in Petersburg, the new administration will work to ensure regulators and utilities are not shutting down certain power generation operations.
Democratic Response and Notable Omissions
House Democratic Leader Phil GiaQuinta (D) offers these comments Wednesday about the Braun agenda announcement: “From lowering health care costs to increasing teacher pay, there are some agenda items from Governor-elect Mike Braun that House Democrats will be fully onboard with.”
“Unfortunately,” Leader GiaQuinta continues, “ his plan has no mention of childcare expansion or universal pre-K, and too much emphasis on expanding the school voucher program. If we want to bolster Indiana’s economy and provide our children with a better future, it starts with childcare and access to early education. We in the House Democratic Caucus look forward to working across the aisle this session to get results for Hoosiers and will work with Governor-elect Braun to make Indiana the best state it can be. While there is common ground, we will continue to push the majority party toward real results; not simply band-aid solutions to the very real problems too many Hoosiers are facing every day.”
Others have also noted the lack of any mention of transportation (road funding, repair, and related logistics, from ports to airports) for the Crossroads of America, as well as the absence of anything about raising tax dollars for public health programs from a cigarette tax or legalizing medical or recreational cannabis sales; new tax dollars from gaming expansion (iGaming, online sales for the Hoosier Lottery, electronic pull tabs for veteran service organizations, or casino license transfers); or campaign finance and ethics law enhancements.