Senate budget panel hears pushback on proposed Indiana Main Street program cuts

Yahoo

21-03-2025

Indiana lawmakers heard multiple hours of budget testimony in the Senate Appropriations Committee on Thursday, March 20, 2025. (Casey Smith/Indiana Capital Chronicle)
Groups that still want to be in the ever-tightening draft of the next state budget — and those hoping not to get booted out — made their cases Thursday before a powerful Senate budget panel.
Trending during testimony were requests for millions of dollars to be retained for Indiana Main Street, a statewide program that helps fund revitalization projects for dozens of Hoosier downtown areas. Locals said it has helped bring critical economic boosts to their communities.
The program already faces significant federal cuts — and advocates cautioned that spending reductions in the current draft of Indiana's budget could cause the initiative to fold altogether.
Multiple others separately called on lawmakers to consider increases to Indiana's cigarette tax. Doing so, proponents said, would provide the state with additional revenue to fund additional line items in the budget and stopgap the decrease in dollars from the federal government.
Absent from the testimony, however, was discussion on education funding matters; a separate Senate subcommittee focused exclusively on school spending earlier in the week.
Senate Republicans have until April 10 to release their version of the next two-year spending plan.
But with revenue growth projected to be moderate in the first year of the upcoming biennium — and slimmer in the second — the state is facing a very tight budget compared to years prior.
'If you're not in, and there's a cost to it, it's pretty unlikely you'll get in — because that means somebody else has to come out,' cautioned budget leader Sen. Ryan Mishler, R-Mishawaka.
Numerous requesters who offered testimony in the Appropriations Committee pointed to proposed cuts to Indiana's Office of Community and Rural Affairs (OCRA), which houses Indiana Main Street.
Marsh Davis, president of Indiana Landmarks, detailed Main Street programming that has been ongoing since the 1970s, 'when local commerce was threatened by big block stores, national chains and suburban malls.' Decades ago, the City of Madison was selected by the National Trust for Historic Preservation as one of three pilot programs in the Midwest 'to test strategies for preserving the historic character and the economic vitality of main streets across America.'
'The key purpose of the program remains constant: teaching communities to adapt and thrive in an ever changing economy,' Davis added. 'Indiana's Main Street program in the past, as well as in recent years, is a national model, but we stand to lose it under the current budget.'
In Gov. Mike Braun's proposed spending plan — and the House-approved version — Republican budget writers reduced OCRA's previous $1.8 million annual appropriation down to just below $1.3 million per year.
Davis said his conversations with the governor's office clarified that Braun 'did not intend to eliminate the Main Street program.' It will be up to lawmakers to remedy the line item, if so.
'The funding for the staff is really the crux of this,' Davis said. 'Without the staff, the program is really rendered totally ineffective.'
Kelly Humrichouser, director of government relations for the national Main Street America program, explained to senators that the program provides technical assistance, training, networking opportunities and implementation grants to communities interested in downtown revitalization. Currently, more than 100 Indiana municipalities participate in the program, equal to 20% of all municipalities in the state.
In 2024 alone, Indiana Main Street communities leveraged $27 million in investment to draw $38 million in private investment, creating 143 new businesses and over 300 new jobs, according to program data.
'This success is not possible without the statewide Indiana Main Street program,' Humrichouser said. 'When you cut the budget and cut that technical assistance, you immediately lose traction in those communities. Those downtown efforts do not sustain without that statewide assistance.'
It was the Main Street program, for example, that helped the City of Franklin's budget grow by more than $100,000 in one year, said Danny Causey, executive director of Discover Downtown Franklin. In 2024, events in the city of roughly 25,000 residents drew more than 80,000 attendees.
Our community is now a regional and statewide example of a thriving small city. This is what Main Street does. It empowers local private businesses and breathes life into rural communities.
– Danny Causey, executive director of Discover Downtown Franklin
'That's 80,000 people supporting small, family-owned businesses — the backbone of both the Indiana and American economies,' Causey said. 'Not long ago, downtown Franklin was struggling. … But with the support of many hardworking community members, plus the addition of Indiana Main Street resources, our community has witnessed a major turnaround, including dozens of downtown events and over 50 new privately owned businesses. Our community is now a regional and statewide example of a thriving small city. This is what Main Street does. It empowers local private businesses and breathes life into rural communities.'
Former Indiana Supreme Court Justice Randall Shepard said, too, that while the state's overall population is going up, 'there's still a lot of migration out of small communities — and Main Street helps them resuscitate themselves.'
'If you're in Fort Wayne or Evansville, you create your own sort of economic strategy. You hire experts and consultants, and so on. You can't do that in Loogootee or Odon,' Shepard continued. 'The Main Street program sort of offers you the chance to access national experts that come in and hold your hand, provide you with the right sort of data, and make a good program that will lift up rural Indiana in ways that obviously, today, we need more than ever.'
Despite repeated failed attempts in recent years, the Indiana Chamber of Commerce and various health advocates continued arguments Thursday for a cigarette tax increase that could net the state millions in additional revenue.
Indiana's current tax of 99.5 cents per pack has remained unchanged since 2007.
Tiffany Nichols, co-chair of Tobacco Free Indiana and advocacy director for the Indiana chapter of the American Lung Association, said that has kept Hoosier cigarette taxes the lowest in the Midwest, and the 39th lowest in the nation. 'At the same time,' she emphasized, 'our smoking rate is the eighth highest in the country.'
'It has been proven time and time again that for every 10% increase in the price of cigarettes, it reduces consumption by 4% among adults and about 7% among youth,' Nichols continued.
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She said a $2 cigarette tax increase could generate more than $300 million in new revenue 'that can be used to fund our state's tobacco prevention and cessation commission, or fill other budgetary needs, such as Medicaid, which often covers health care costs associated with tackle tobacco use.'
Indiana has consistently received 'F' grades in the American Lung Association's annual State of Tobacco Control Report for tobacco taxes and spending on tobacco prevention and cessation programs.
But lawmakers, specifically on the Senate side, have long defied calls for increasing the cigarette tax — actually decreasing the tax on vaping products from 25% to 15% in 2022.
The year before that, during the 2021 budget session, the House increased a 50-cent-per-pack tax in their budget proposal, which the Senate stripped out, leaving the tax as is. The House's proposal didn't include a cigarette tax in 2023, nor does it this year.
Supporters said an increase of just $1 would not be 'an effective enough incentive for people to decide to finally quit.' Increasing by $2 per pack, however, is estimated to bring in $318 million in new annual revenue and price-out many current and future users — especially young ones.
Allie Kast Gregg, with Indiana's chapter of the American Cancer Society's Action Network, noted that tobacco use is the leading cause of preventable death in Indiana, resulting in more than 11,000 deaths each year — costing the state's Medicaid program more than $630 million annually.
Later Thursday, Senate President Pro Tem Rodric Bray kept the door open for a possible cigarette tax change.
'It seems our caucus is more open to that this year than it has been in years past. Perhaps that's partly because there are some (economic) challenges that we have,' Bray told reporters. 'It's going to be a challenging budget year — even in the best of circumstances, even assuming that the April forecast doesn't get worse. That's not guaranteed, because it looks like it could be problematic. That's a conversation that's kind of ongoing right now. I don't have the ability to say whether we're actually going to do that or not.'
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