Indiana Business Climate on the Rise Again

Improvement for Indiana in another national economic development ranking is nothing new. The latest: a rise from sixth to fifth in Chief Executive magazine’s "Best and Worst States for Business." (Indiana had moved from 16th in 2010 to sixth a year ago).

Below is the key passage from the article detailing the opinions of CEOs from across the country:

North Carolina, Tennessee, Indiana, Virginia, South Carolina, Georgia and Utah held their positions in the top 10, with Indiana moving up a notch to fifth. CEOs indicate that workforce quality is the state’s single greatest strength, and since it became the 23rd right-to-work state last year {actually this year}, the Hoosier State is likely to punch above its weight competitively in the future. “Indiana is like a breath of fresh air,” volunteered one manufacturing CEO. “I have operated on both coasts, the Southeast and Chicago, and Indiana is where I will keep my manufacturing operations.”

It may be no accident that most of the states in the top 20 are also right-to-work states, as labor force flexibility is highly sought after when a business seeks a location. Several economists, most notably Ohio State’s Richard Vedder and Harvard’s Robert Barro, have found that the economies in R-to-W areas grow faster than other states, have higher employment and attract more inward migration.

By my count, the entire top 10 and 17 of the 20 are RTW states. Texas earns No. 1 for the eighth year in a row with California at the opposite end — also for eight consecutive years. Rounding out the top five: Florida, North Carolina and Tennessee. The bottom five has Michigan at No. 46, followed by Massachusetts, Illinois and New York.

Full story; Indiana breakout; Indiana Economic Development Corporation release.

Is Social Media Changing Your Work Life for the Better?

In the July/August issue of the Indiana Chamber’s BizVoice magazine® we look at the impact of social media on business.

To do that properly, we’d like to hear from Hoosier companies on what they’re doing and what they see as the benefits of their social media activities.

Maybe you reach customers via a blog, Facebook or Twitter. Or it’s more of an internal tool to communicate with your employees. Perhaps you even have a person dedicated to social media. Basically, if your company consistently uses social media in some way to impact the business, we would appreciate you getting in touch!

Companies of all industries and sizes are welcome.

Please e-mail Rebecca at rpatrick@indianachamber.com.

This School Board Deserves ‘A’ Grade

"Change" is not a four-letter word. And, despite what many seem to believe, it’s not always bad either.

Change is especially important when it comes to K-12 education. Reformers often appropriately use the term "kids first" when it comes to our educational priorities. Too many times, however, "adults first" is the prevailing philosophy. That has to change (there’s that magic word again) and it is in one Ohio school district.

Check out the excerpts from an excellent report by the Education Action Group:

Springboro’s old philosophy was like that of many public school districts: Teachers were given annual “step” raises and administrators received nice salary perks, whether there was money in the district’s budget or not. If the district couldn’t afford it, voters were expected to approve tax hikes to pay for it all, or accept cuts to student services.

That old “adults first” approach was on full display in 2009, when district officials chose to address their financial woes by eliminating busing for high school students, laying off 30 district employees, and raising pay-to-play fees for after school activities.

Not long after that, Kelly Kohls, a mother of five and a former college professor, joined the Springboro school board and a new “children first” philosophy began to emerge.

Kohls’ approach of challenging the “business as usual” mindset has proven very effective. The district now requires employees to contribute more for their health insurance plans. Backdoor bonuses for administrators have been eliminated, annual teacher “step” raises have been frozen, and a variety of spending cuts have been implemented.

The results are evident in the school’s financial trajectory. A few years ago the district was projecting a $30 million deficit. Today it’s projecting a $4 million surplus, even though the community is still reeling from the weak economy, which has caused a 400 percent increase in the number of people needing assistance from the local food bank, according to Kohls.

Kohls’ self-described “kids first” approach has caused a lot of heartburn among Springboro’s school establishment. During her brief tenure on the board, district officials have publicly blamed Kohls for the defeat of a $6 million school levy, the departures of a superintendent, a district treasurer, a school board president and the large turnover in school administrators.

Members of the Springboro Education Association – the local teachers union – use school board meetings to excoriate Kohls for opposing teacher pay raises and proposing budget cuts.
 
“Some people get so entrenched in the old philosophy that it’s tough to get them to think whether or not something is going to help the kids,” Kohls says of the criticism. “We need a different way of thinking.”
 
Voters seem to agree. Last November, they elected two of Kohls’ allies, giving fiscal conservatives control of the five-member school board, which began its current term in January.

Kohls says her approach has been to “ask a lot of questions” and to explain the board’s spending decisions to the community.
 
During her campaign for school board, for instance, Kohls asked why Springboro taxpayers were paying both the district’s and administrators’ contributions to the state retirement fund, especially since high school busing had just been cut to save money.
 
She reasoned that the amount of money spent on the retirement perk ($180,000) should be used to reinstate high school busing ($125,000). Kohls shared her proposal with the community on the Educate Springboro website and now the administrative perk is gone.
 
When the district’s health insurance costs increased by $830,000, Kohls proposed that employee contributions be raised to 20 percent – in line with what average Springboro residents paid – to offset the extra costs. She thought it made sense, especially since the district was in the middle of a financial emergency that left schools unable to purchase new textbooks or make basic building repairs. Her fellow board members at the time didn’t agree, and the district absorbed the increase.  
 
But Kohls used the Educate Springboro website to bring her case to the public, and the philosophical shift became evident.

“People started looking at the other four board members, and asked, ‘How could you say yes to the increase?’” Kohls says.

Today, employees pay 15 percent of their health insurance costs, and the district has joined a health care consortium which has resulted in nearly $6 million in savings.

Since January, the new board has enshrined its “children first” philosophy in a series of 28 goals, which include setting district money aside to help prepare students for the ACT test, among other things.
 
The board has switched to zero-based budgeting, meaning that school budgets will not automatically increase every year. Instead, teachers are being asked to submit annual budgets outlining specific resources they need.
 
The board is also developing policies that prioritize district spending, to ensure that student-centered spending needs are met before employee benefits and wage increases are considered. Kohls is crafting a point system to determine which employees will receive bonuses from the leftover funds.