Monthly Archives: February 2009

Township Bill Boosted, Passed by Senate

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In a real victory for reforming Indiana’s township government, the Indiana Chamber and allies worked vigorously to improve SB 512 and successfully passed that revised version. As introduced, SB 512 eliminated townships (which is preferred), but to get the bill passed from the Senate Local Government Committee it was greatly watered down.

The day before the final vote before the full Senate, two favorable amendments were added and one bad amendment was defeated. As the amended bill was up for the final vote, the prospects for victory were not good. During the past few weeks, many township officials and their lobbyists (paid for with taxpayers’ dollars) were at the Statehouse in force to apply pressure on their legislators to oppose the bill. With the Daniels’ administration’s team and members of the Chamber-led coalition, we successfully swayed at least five votes to get to the final tally of 28-22 to pass the bill. 

The Chamber wishes to thank Sen. Lawson for her hard work and leadership on getting this bill passed. Senator David Long (R-Fort Wayne) provided leadership of the Republican caucus, where all of the supporting votes came from. We know there are several Democrat senators who would have supported this bill, but were unfortunately not permitted to vote that way.

Indiana Chamber board members and other citizens who contacted legislators to help swing several crucial votes played a critical role in the outcome. Senate Bill 512 is one of the keystone local government efficiency bills from the Kernan-Shepard Commission recommendations. We will work diligently to keep it moving in the House and bring it to a successful conclusion at the end of the session. 

A More Robust Recovery Here at Home

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Two Michaels (or Mikes in the less formal approach) combine to offer an interesting and refreshing take on our current economic status. Michael Snyder, principal of The MEK Group (a business development consulting firm), also writes a weekly column for MidwestBusiness.com. Michael Hicks, the director of Ball State’s Center for Business & Economic Research, is a leading state economist.

In an interview with Snyder, Hicks presents an uplifting — but still realistic — view of the downturn and the prospects for when the turnaround will occur. Some economic indicators are starting to turn, Hicks says, and an official end to the recession may be closer than what many think. The practical recovery, unfortunately, takes a while longer.

Hicks also offers that the competitive advantage Indiana has built up in recent years will pay strong dividends in the revival phase. Some former Hoosiers with that entrepreneurial spirit might well find it a good time to come back home.

Read the full story. And thanks to both Mikes for their continuing efforts.

Unemployment Insurance Fund Negative Balance Growing to an Alarming Level

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Categories: Business News, Government, Human Resources

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The state’s Unemployment Insurance (UI) Trust Fund is not just broke and in debt to the federal government to the tune of over $300 million through January; it’s going further in the hole by a magnitude that few have come to grips with. Conservative estimates suggest that Indiana is going to have to borrow somewhere in the neighborhood of $1.5 billion to meet its obligations.

The system needs a major overall. It suffers from a structural deficit that is getting exponentially worse as the economy continues to eliminate jobs. The problem actually began well before the economy tanked. A deceivingly large balance from several years ago has steadily disappeared. Last year the fund took in only $579 million, while paying out $986 million in benefits – a rounded off annual structural deficit of $400 million. Clearly there is a problem with the system.

Assuming the revenues paid in by employers in 2009 are equal to 2008 (which is questionable) and the monthly benefit demand remains $150 million (also questionable), the structural deficit for 2009 will be a whopping $1.2 billion. Unless something is done, by this time next year the negative balance will total approximately $1.8 billion. Federal stimulus money is anticipated, but it also increases and extends the mandatory benefits, exacerbating the problem rather than ameliorating it. Keep an eye on this issue because even though it is currently being overshadowed by other topics (budget, stimulus plan, etc.) it looks to become a major part of the legislative puzzle before the session ends.

Safety Worth Celebrating

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Categories: Chamber Conferences, Human Resources

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Safety is something that can easily be taken for granted – that is until something happens.

When an employee died on the job at Strick Corporation in 2002, the Monroe-based company knew change was needed. “The incident rate was almost a recordable one (to OSHA) each day” prior to that fatality, notes Cheryl Pike, plant nurse and safety coordinator.

Impacted by the death of a co-worker, employees started volunteering for the company’s safety programs. The company’s culture changed for the better. The transformation at Strick Corporation earned the company INSHARP (Indiana Safety and Health Achievement Recognition Program) status in 2008.

Today, Strick was honored at the 2009 Governor’s Workplace Safety Awards for its overall safety program.

Joining Strick in earning awards at the Indiana Safety and Health Conference were:

  • Turner Construction Company of Indiana LLC in Indianapolis – education and outreach by a construction company award
  • Bayer Healthcare LLC, Product Supply/Diabetes Care facility in Mishawaka – education and outreach by a large company award
  • Futurex Industries Inc. in Bloomingdale – education and outreach by a medium company award
  • Monsanto Company, Windfall Soybean Production division in Remington – education and outreach by a small company award
  • ERMCO Inc. in Indianapolis – innovation by a specialty contractor award
  • Indianapolis Power & Light Company – innovation by a large company award
  • Emerson Industrial Automation, Emerson Power Transmission division in Monticello – innovation by a medium company award
  • DSM NeoResins+ in Frankfort – innovation by a small company award
  • Kimball Electronics and Advanced Rehabilitation, Inc. in Jasper – partnerships award
  • Cerrowire Inc. in Crothersville – small company safety award
  • Solid Platforms Inc. in Portage – specialty contractor safety award

The 2009 Governor’s Workplace Safety Awards are presented by the Indiana Department of Labor, on behalf of Gov. Mitch Daniels, the Central Indiana Chapter of the American Society of Safety Engineers and the Indiana Chamber.

Avoid the EFCA Rat Trap

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Geoff O’Hara of the United States Chamber offered a great post last week about the perceptions, realities, and tactics involved in the Employee Free Choice Act (EFCA). Here it is in its entirety:

Just after 8:00 a.m. on a soggy morning in Providence, I was approaching the local Chamber of Commerce to participate in a briefing to small businesses on the Employee Free Choice Act when I saw it…a rat. And not just any rat. This was a HUGE rat.  Bigger than a grizzly bear! Right on the sidewalk in front of the building!

Fortunately for the musophobic crowd (if they’re even still reading this), this was not (a) live rat. It was a 15 foot high inflatable rat – serving as the anchor prop for a group of about 25 people protesting the seminar at which I was about to speak. According to one protestor – the rat symbolized anyone that was anti-union. And their ongoing chants — "What’s disgusting?…Union busting!" — echoed that sentiment.

I was certainly surprised to see that they even make rats that big (what other uses would it have?), but what surprised me even more was the disconnect between the protestors’ message, and the subject of this morning’s seminar.  The Employee Free Choice Act isn’t anti-union at all. And it doesn’t have anything to do with ‘union busting.’  Instead, it is legislation that would dramatically alter the process under which unions organize – essentially turning upside down decades of established labor law.

Employers would lose the opportunity to be part of a dialogue with employees about forming a union; would face binding arbitration on a new contract within a short timeframe; and would be subject to stiff one-sided new penalties for any violations.

Employees would lose access to a secret ballot when deciding whether or not to unionize, and could be subject to coercion and strong arm tactics from union organizers.

Employers lose, employees lose . . . the only group that stands to gain under the Employee Free Choice Act is the union organizers themselves.

Hmm . . . I smell a rat.

Riding the Government Reform Roller Coaster

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The effort to introduce the concepts of efficiency and better service to citizens into Indiana’s local government structure has seen more ups and downs than your favorite ride at Holiday World or any amusement park of your choice.

Following seven-plus weeks of progress, retreat, debate and committee members offering support for the broken-beyond-repair status quo, the full Senate restored teeth to some of the legislation on Tuesday.

Eliminating township boards in 91 counties (why not Marion, we must ask?) would be a tremendous step. Doing away with rampant nepotism and unconsionable levels of budget reserves are also a move in the right direction. Some county, library and election reforms are also in play.

The attention turns to the House, with the ball resting with Speaker Pat Bauer. The nearly 40-year veteran of the Statehouse wars has promised all along to take a look at what comes over from the Senate — and he repeated that pledge to the Indiana Chamber’s executive committee last week. Not an overwhelming endorsement, but there is some optimism. This should not be a partisan issue; all can find a place on the bandwagon for better government.

MySmartgov.org makes the case for change. Indiana Chamber members can get the latest in a March 6 First Friday Conference Call featuring Chamber expert Mark Lawrance and government reform commission member Louis Mahern.

Oprah Labels Holiday World a Top ‘Wacky’ Destination for Families

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Well, you’ve made it, Holiday World & Splashin’ Safari; Oprah thinks you’re cool:

The popular website Oprah.com just released its list of “Wacky Family Attractions” in a feature designed to encourage families to vacation closer to home this year “when time and money are in short supply.” Holiday World & Splashin’ Safari is one of the eight family attractions recommended on the list.

“If Oprah wants to call us ‘wacky,’ we don’t mind a bit,” says the parks’ president, Will Koch. “Come to think of it, it is a little wacky for a theme park to play Jingle Bells in the middle of July!”

The Oprah.com article includes a photo of Santa Claus in his Holiday World summer garb along with a brief history of the park and description of the variety of rides—and holidays—featured at the world’s first theme park. Other parks included in the feature are Mammoth Cave National Park in Kentucky and Legoland in California.

Oprah.com is one of the 2,000 most-visited websites on the Internet.

Holiday World Theme Park opens its 63rd season on May 2 with the premiere of Pilgrims Plunge, the world’s tallest water ride; Splashin’ Safari Water Park opens May 15. For more information, visit the parks’ website at www.HolidayWorld.com or call 1-877-463-2645.

Kudos to Holiday World, an Indiana Chamber member. Check out the mention on Oprah’s site here.

Cato: Beware of Government Employee Burden on Taxpayers

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A blog post by the Cato Institute raises an interesting question: What happens when taxpayers can’t afford to pay the salaries and benefits of the expanding government workforce? The obvious answer is, "Taxpayers can always afford it." We’ll just likely end up debating the meaning of the word "afford" as much as President Clinton debated the meaning of the word "is." At any rate, the post from Tad DeHaven (former deputy director of the Indiana OMB, btw) is worthwhile:

Dennis Cauchon of USA Today and Stephane Fitch of Forbes recently penned articles on the excessive nature of state and local government employee benefits and the threat taxpayers face as a result.

First, Cauchon reports that “State and local governments have set aside virtually no money to pay $1 trillion or more in medical benefits for retired civil servants…With bills coming due as Baby Boomers start to retire, states, cities, school districts and other governments may be forced to raise taxes, cut benefits or both — a task made especially difficult in an economic downturn.”

I would add that the task of cutting benefits for government employees is especially difficult because state and local politicians are generally beholden to the government employee unions. Even those policymakers not predisposed to carry water for the unions are hesitant to ruffle the feathers of a sizable voting block, not to mention a vocal one that still has a lot of regular citizens conned into believing government employees are underpaid, selfless, public “servants.”  Trust me, I’ve witnessed this game first hand.

Cauchon also spotlights the big picture problem: “These medical costs are part of a larger burden taxpayers face in providing health care for an aging population. The federal government has a $1.2 trillion unfunded obligation to pay medical costs for retired federal workers and military personnel. Medicare and Social Security push the nation’s unfunded promises above $50 trillion.”  He also notes that the same private sector employees who pay for these benefits via taxes are not so lucky: “Unlike private companies, most governments subsidize health insurance for retired employees.”

SBA: Businesses Should Beware of Stimulus Scam Letters

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A press release from the Small Business Administration:

WASHINGTON – The U.S. Small Business Administration issued a scam alert (Feb. 18) to small businesses, warning them not to respond to letters falsely claiming to have been sent by the SBA asking for bank account information in order to qualify them for federal tax rebates. 

The fraudulent letters were sent out with what appears to be an SBA letterhead to small businesses across the country, advising recipients that they may be eligible for a tax rebate under the Economic Stimulus Act, and that SBA is assessing their eligibility for such a rebate.  The letter asks the small business to provide the name of its bank and account number. 

These letters have not been sent by or authorized by the SBA, and all small businesses are strongly advised not to respond to them.

The scheme is similar in many ways to e-mail scams often referred to as “phishing” that seek personal data and financial account information that enables another party to access (an) individual’s bank accounts or to engage in identity theft.

The SBA is working with the SBA Office of Inspector General to investigate this matter. The Office of Inspector General asks that anyone who receives such a letter report it to the OIG Fraud Line at 1 (800) 767-0385, or e-mail at OIGHotline@sba.gov.

Out of the ‘Slums’: Economic Lessons from an Oscar Winner

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Did you watch the Oscars last night? Well, if you haven’t heard, the awards confirmed the fact that "Slumdog Millionaire" is not a bad picture. (It also confirmed that "Wolverine" is surprisingly deft at singing show tunes. Take that, Magneto.)

But according to Reason magazine’s blog, "Slumdog" is much more than an interesting tale of gameshow prowess. It also serves as an illumination on the plight of India, begging discussion about the progress the country has made by freeing up its markets and ultimately its people, and the steps it still needs to take to help its poor rise above poverty:

For decades would-be entrepreneurs staggered under the weight of corruption and bureaucracy. Want to import a computer for your business? You’d have to get permission from a bureaucrat. Want to sell food from a small cart? You’d need all kinds of licenses. 

But in the 1990s, India emerged as a high-tech powerhouse. What changed?

"In the 1990s India started liberalizing its economy," says (Shikha Dalmia, Reason Foundation senior analyst), "and it did three things: cut taxes, liberalized trade, and deregulated business." Although they failed to cut the kind of red tape that entangled Slumdog‘s orphans, the reforms did make it easier for more Indians to start businesses and hire employees.

"One IT company doesn’t just employ computer professionals," says Dalmia. "It also needs landscaping services, cleaning services, and restaurants. There was this tremendous spillover effect that allowed people to lift themselves out of poverty."

Since the early 1990s, India has cut its poverty rate in half. About 300 million Indians—equivalent to the population of the entire United States—escaped the hunger and deprivation of extreme poverty thanks to pro-market reforms that increased economic activity.

Yet here in America we’re turning away from market reform. Says Dalmia, "It’s just this great conundrum that at the same time that deregulation and markets have produced such dramatic results in India, they are falling into suspicion in America." Dalmia’s prescription for India is at odds with what politicians have chosen to "stimulate" the United States. "What India needs to do is continue apace with its liberalization effort, but expand it to include the poor. Release them from the shackles of government corruption and government bureaucracy."