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Indiana's New Family Tax Credit
The Indiana Senate has unanimously advanced a bill offering a $500 tax credit per child for families, aimed at easing the financial burden of raising children.
Why it matters: This initiative is part of broader tax relief efforts targeting various demographics, including seniors and veterans.
- It aims to support young families struggling with child care costs, which consume around 11.2% of their annual income.
The big picture: Despite a cap of $10,000 for total credits, currently benefiting only about 20 families, lawmakers hope to increase this during budget discussions.
- The credit is part of a larger legislative push to prioritize family building, including measures for paid leave.
By the numbers: Indiana's standard dependent child deduction is $1,500, but recent legislation allows families a one-time doubling of this deduction for children born after 2023.
- Hoosiers can include the new credit in their 2025 tax return if the bill is enacted.
What's next: The bill moves to the House, where amendments are anticipated to expand its impact.
Trump's Tariff Escalation Plan
President Trump is set to impose new tariffs on Canada and Mexico starting Tuesday, while doubling the tariff on imports from China to 20%. This move aims to combat the smuggling of illicit drugs like fentanyl into the U.S.
Why it matters: The proposed tariffs could exacerbate inflation and impact key sectors such as automotive and energy.
- Consumers and businesses fear higher prices and slower economic growth.
By the numbers: The U.S. seized 21,100 pounds of fentanyl at the Mexican border last year, compared to 43 pounds at the Canadian border.
- A 25% tariff is planned for Mexico and Canada, with a special 10% tariff on Canadian energy products.
What's next: Mexico and Canada are in talks with the U.S. to avert the tariffs, emphasizing their own anti-trafficking efforts.
- President Trump has hinted at expanding tariffs to European countries and other sectors, including autos and pharmaceuticals.
The backdrop: The announcement comes amid a drop in U.S. consumer confidence, with a 7-point decrease in the confidence index, its largest fall since August 2021.
Eli Lilly Unveils Plan for Four U.S. "Mega-Sites"
Eli Lilly and Co. said Wednesday it will open four new U.S. manufacturing "mega sites" in the next five years, in a bid to reduce its reliance on overseas suppliers and take more control over its supply chain.
Why it matters: The "reshoring" comes amid the Trump administration's push to move more manufacturing inside U.S. borders and will create 3,000 jobs, as well as 10,000 construction jobs, Lilly said.
Driving the news: Three of the sites will be used to create active pharmaceutical ingredients while a fourth will be used for extending the company's manufacturing of injectable therapies, CEO David Ricks said.
- The pharmaceutical giant said it has been in negotiations with several states and is open to additional bids, with an announcement later this year.
- Lilly's products include the blockbuster injectable GLP-1 drugs Mounjaro and Zepbound, which have been hailed as game changers against diabetes and obesity but also derided for their high price tags.
Between the lines: Lilly's announcement, made in Washington, D.C. with Commerce Secretary Howard Lutnick on hand, featured optimistic statements about helping working families and increasing exports of American-made medicines.
- "Our confidence positions us to reinvigorate domestic manufacturing," Ricks said.
- He called Trump's 2017 tax cuts, which are up for renewal in Congress this year, "foundational" to Lilly's domestic manufacturing investments.
- "It is essential that these policies are extended this year," he said.
Lutnick said Lilly's commitment "is exactly what the Trump administration is all about," adding,"Our American workforce needs our great companies and the great companies of the world to come back home."
Lilly said the new facilities will "reshore critical capabilities of small molecule chemical synthesis."
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The pharmaceutical industry has been pushing for changes to the Inflation Reduction Act's drug provisions, including the so-called pill penalty — a timeline in the law that makes small molecule drugs eligible for Medicare price negotiations four years earlier than complex biologics.
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Manufacturers say that gives them less incentive to invest in new pills and capsules. (Axios)
Indiana's Federal Funding Dilemma
Indiana receives over $20 billion annually from the federal government, making up 44% of its budget. Proposed federal cuts under President Trump could severely impact this funding.
Why it matters: Federal funds support key areas like Medicaid, education, and public health in Indiana.
- The state is the third-most reliant on federal dollars, behind Louisiana and Mississippi.
By the numbers: Indiana received nearly $23.4 billion in federal funds in 2024.
- Over half of this funding supports Medicaid, which covers over 1.9 million Hoosiers.
- The state's Department of Education received $1.8 billion, while the Division of Family Resources got $1.9 billion.
What's next: The Indiana legislature is crafting a two-year budget amidst uncertain federal support.
- Potential Medicaid cuts are a significant concern, with discussions on work requirements and eligibility checks ongoing.
The stakes: Hoosiers working for federal agencies, including the 18,284 in military roles, face job uncertainty.
- The state's ability to fund education and infrastructure could be compromised if federal dollars dwindle.
- Rural hospitals, heavily reliant on Medicaid, may face closures, impacting healthcare access for many residents.
Additional facts: Proposed budget cuts could also affect federal workers in Indiana, where 24,499 are employed by federal agencies, including the Crane Naval Air Station.
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Federal funds are crucial for programs like the Healthy Indiana Plan, covering over 752,000 residents. (Indiana Capitol Chronicle)
Braun's Push for Work
Governor Mike Braun signed executive orders to enhance Indiana's unemployment system by strengthening anti-fraud measures and tightening work-search requirements.
Why it matters: Indiana aims to promote a culture of work while safeguarding taxpayer dollars and maintaining program integrity.
- Unemployment insurance is designed as a temporary safety net, providing up to 26 weeks of support at 47% of pre-layoff income.
The big picture: Indiana paid out an average of $285 million annually in unemployment benefits from 2015 to 2019, with a pandemic spike to $6.7 billion in 2020.
- The state seeks to recover $55 million lost to fraudulent claims over the past three years.
What's next: The Department of Workforce Development will require claimants to engage in more meaningful work-search activities and verify eligibility using state and federal data.
- Auditing work-search activities
- Focusing on those likely to exhaust benefits
- Tailoring reemployment services
Additional insights: Indiana's unemployment fund is healthy, yet the state is taking proactive measures to prevent fraud and encourage employment.
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The orders encourage individualized job search plans and assess best practices from other states to improve reemployment efforts. (Indiana Capitol Chronicle)
Braun Expands Parental Leave
Governor Mike Braun, alongside his wife Maureen Braun, signed an executive order to double paid leave for state employees post-childbirth.
Why it matters: This policy enhances support for working families, promoting Indiana as a family-friendly state employer.
- New mothers gain additional "childbirth recovery leave," with up to 6 weeks after a vaginal delivery and 8 weeks after a C-section (this is in addition to the current 4-week policy.)
Key changes: The new executive order allows all employees, regardless of their employment duration, to access new parent leave.
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"Childbirth recovery leave" can be used consecutively with existing 150-hour new parent leave.
- Employees experiencing stillbirths after 20 weeks qualify for the same recovery leave.
The big picture: Indiana's policy steps up where federal paid family leave is absent, setting a precedent for broader state-level initiatives.
- Advocacy groups urge the General Assembly to expand such benefits statewide, citing only a quarter of Indiana working parents have paid leave access.
What's next: The Indiana Community Action Poverty Institute supports the move, hoping it inspires legislative action for comprehensive statewide policies. (Indy Star)
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