Comment Period Open for EPA’s Latest Carbon Regulation

Potentially devastating to our state. That’s how we view a new Environmental Protection Agency (EPA) regulation to strictly limit carbon emissions from the nation’s existing coal-fired power plants. This latest proposal comes on the heels of a plan to put in place greater pollution controls for any new power plants.

The President has left no doubt that he is mounting an all-out war against coal. Congress refused to bite on a climate change bill, so he’s spending his second term trying to legislate via the EPA. Smart, necessary regulations make sense, but that’s the opposite of what we have here; it’s entirely unreasonable given our nation’s energy needs.

These EPA regulations also will barely even move the needle toward reducing carbon emissions (not even by 2% according to the U.S. Chamber of Commerce’s Institute for 21st Century Energy), but they will deal a tangible blow to the national and state economies.

The Institute for 21st Century Energy predicts the regulations will result in a whopping $51 billion in annual economic losses through 2030. On top of that, some 224,000 Americans will lose their jobs and consumers will pay $289 billion more for electricity. Separately, the U.S. Department of Energy has estimated the electricity cost increase could be as much as 80%.

Most Hoosier businesses and families can’t afford to pay that, and they certainly can’t afford a slumping economy and job market.

The reality is that Indiana will be hit far harder than most states because it’s the number one per capita manufacturing state in the nation. Over 80% of Indiana’s electric power comes from coal, compared to only 45% for the country. Despite diversification efforts, coal remains Indiana’s primary energy source.

For decades, companies that have located in Indiana have often cited a reliable and affordable supply of electricity among the determining factors, according to site selectors and information gathered by state government. Losing that competitive advantage entirely is now a real possibility with coal coming under attack by the Obama administration.

We encourage you to let the EPA know your thoughts on this latest regulation by visiting www.indianachamber.com/EPA. Also, let your members of Congress know; they need to take action before irreparable damage is done to our economy.

Common Core Kept in Place

House Bill 1427 preserves the state’s Common Core academic standards and allows for continued implementation.

The Indiana General Assembly rejected the attacks on Common Core and allowed the standards, which the State Board of Education adopted in August 2010, to continue to be implemented. (Only the elements of the program not already adopted – such as testing and science standards – would be paused under HB 1427).

In another strong move, the Legislature mandated standards that include Common Core as the foundation and require college and career readiness criteria. By those standards still being based on Common Core, that should assure that Indiana keeps its federal waiver (that removed us from the federal No Child Left Behind program) and Title I funding for our schools.

It was also critically important that the ultimate decision-making on Common Core remain with the State Board of Education (as it does), which has adopted all previous Indiana standards (including Common Core) and doesn’t face the same politically-charged environment that exists at the Statehouse.

While we don’t agree that actual new adoption procedures are necessary, several positives could result from that. Further review of the Common Core standards would hopefully provide the general public with a better understanding of what Common Core does and doesn’t do. Plus it will give the state the opportunity to determine which, if any, additional standards we should adopt. (The Common Core multi-state agreement permits Indiana to add up to 15% of its own standards to the program.)

The Indiana Chamber advocated for the Common Core standards to be left in place, both for the merits of the program and the consistency of the rulemaking process.

Governor Gets Down to Business Quickly

While the Indiana General Assembly began its work on January 7, new Gov. Mike Pence had to wait a week for his January 14 inauguration. He quickly went to work, however, with significant positive actions on his first two days on the job.

A series of executive orders that Pence signed following his official ascension into office included a moratorium on new rules and regulations (with obvious emergency exceptions) that were not proposed before January 14, as well as a cost-benefit analysis of existing administrative rules. Priority will be given to review of those rules with the most negative effect on job creation and economic development.

Candidate Pence promised this action leading up to the election. While federal regulatory challenges are often at the forefront today, this step will help ensure that state government is not unnecessarily limiting job and economic growth.

On day two, the Pence team delivered a two-year, $29 billion spending plan to the State Budget Committee. The first six pages of this extensive document provide an overview of the key elements.

This is a very good starting point for legislators. It is a fiscally sound proposal, with a focus on meeting key state priorities and providing the 10% individual income tax relief (which also encompasses 90% of Hoosier businesses) that Pence proposed in his campaign. As we’ve indicated previously, lawmakers have questioned whether the income tax cut should take precedence over other budget desires. That will be worked out in the legislative process and could be determined by the updated revenue forecast that will be presented in early April.

A few highlights:

  • A 1% increase in each of the next two years for K-12 and higher education. The second year for K-12 would have that 1% be divided among the state’s highest performing schools. Combined, the education funding totals 65% of the budget.
  • While the administration did not include money to specifically expand the Medicaid program as outlined under federal health care reform, it does significantly increase funding for health insurance for the poor – from $1.65 billion this year to $2.1 billion in 2015.
  • The budget calls for a change in projected excess revenues. After 12.5% of annual spending is set aside in reserves, the remainder would be divided between the automatic income tax credits that were enacted during the Daniels administration and a new fund to help maintain roads, bridges and other infrastructure critical to economic growth.
  • Spending is kept in line in this proposal. A structural surplus is maintained and reserves are allocated effectively, with the infrastructure fund a good start to the larger question of financing future transportation needs. The Chamber will be working with the governor’s team and legislators to help ensure that as many pro-job, pro-economy priorities as possible are achieved in a responsible manner.

Our People, Our Future: Why We “Stick Our Noses” in Education

The question came our way much more frequently in the past. The fact that it occasionally is still asked today is a true mystery.

The inquiry: Why is the Indiana Chamber of Commerce “sticking its nose in the middle of” education debates? The answer: Skilled workers, if it hasn’t always been this way, are the absolute number one factor in determining the success of our state’s companies, their employees and our communities.

Yes, many other factors come into play. Tax burdens, health care costs, moving people and products, having adequate and affordable natural resources, and encouraging entrepreneurs are a few of the other critical ingredients. But as Mitch Daniels, who just wrapped up eight years as governor, is fond of saying, Indiana has established a pretty good sandbox or toolkit.

All the sand in the desert or tools in the garage are not enough if people aren’t prepared to take advantage. Organizations of all types and sizes throughout the state (and country) will quickly tell anyone who listens that their employees are their greatest asset. When that human talent is not able to adapt, work in teams or learn new technologies, that critical asset can turn into a liability.

Many of you have likely heard me say or read in BizVoice that it’s no accident that Outstanding Talent is the top driver listed in the Indiana Vision 2025 plan. What does that mean? Indiana must excel at all levels of education and workforce training. We have to make sure Hoosiers – whether young students, those just beginning their careers or older employees – have the resources they need to be successful. We have to challenge the status quo. We have to demand improvement and accept innovation.

Any less would be a dramatic disservice. That is why the Indiana Chamber, and all of us, needs to be in the middle of the debate.