Many Tech, Entrepreneurship and Innovation Priorities Remain in Budget Bill

The House Republicans’ budget priorities were recently announced, as HB 1001 goes from the Governor’s initial budget priorities to more in-depth House consideration. The Chamber was glad to see several technology and innovation priorities in the bill including:

  • Makes the Venture Capital Tax Credit transferrable to people who don’t have Indiana tax liability. It also removes the 2021 expiration date of the tax credit, which helps enhance certainty
  • Several parts of the $1 billion over 10 years for innovation and entrepreneurship plan:
    • It caps the amount of the Next Level Trust Fund that can be invested in Indiana businesses to 50% of that $500 million fund. It still appoints a board of trustees to oversee the investment policy of the fund
    • Has $20 million over the two years for the Indiana Biosciences Research Institute
    • Due to budget pressure, it reduced the 21st Century Research and Development Fund by $10 million per year to $20 million per year
    • It allocates $1 million for the biennium for the Launch Indiana program

We expect many changes in HB 1001 as it advances through the legislature. The Chamber will continue to educate legislators on these important economic development priorities currently in the bill and why they need to remain.

Road Funding Bill Now Travels to Senate

Chamber-supported HB 1002 was amended last week on the House Floor and then passed 61-36 largely along party lines and is now up for consideration by the Senate.

The floor amendment prohibits any new toll road within 75 miles of any other toll road, terminates the gas tax indexing after July 2024 and allows additional time for public comment before a significant road project begins. Earlier, changes were made to the bill to have all sales taxes collected on fuel costs to be designated for roads (currently it’s only a penny of the seven-cent tax) starting in 2018 versus a phase-in of the sales tax to roads over three years through 2021. This creates a potential general fund budget deficit of over $300 million a year that must be addressed, either through budget cuts or other identified revenue sources. Moreover, the Chamber will continue to advocate for a strong, user-fee based model to address Indiana’s $1.2 billion per year road funding gap.

Call to Action: Connect with your state senator via our grassroots page. Let them know today that long-term funding is important to you and your company!

Better Data for Indiana Bill Advances

The Indiana Chamber supports HB 1470 (on management of government data), authored by Rep. David Ober.

During the second hearing last week, language was added to reframe how the MPH will be built out. Included is how data can be accessed that could make state government and agencies more transparent, how legislative services could use information from MPH for data-driven policy and various operational aspects of the MPH for information input and output. The Chamber will continue to work with Rep. Ober and the administration to ensure the MPH is as useful as possible for the executive and legislative branches of government, as well as offers strong external uses for stakeholders outside of government.

Heard by the Government and Regulatory Reform Committee; amended and passed 8-0, and now headed to the full House.

Real Journey Begins for Transportation Funding Bill

During a six-hour hearing before the House Roads and Transportation Committee, there were some technical changes made in the bill and the annual increase for the fuel tax was capped to no more than one cent per year. Chamber President Kevin Brinegar provided testimony that this bill was about “revenue recovery” on the lost buying power of the gas tax since it was last raised. (Read the Chamber’s full testimony.) That lost revenue, plus better fuel economy means less money for roads. The Chamber is grateful to board members Drew Coolidge with SIRVA (moving company) in Fort Wayne and John Thompson (owner of several Indiana-based businesses) who testified how better roads impact their business, their communities and Indiana. House Bill 1002 will be considered in the coming weeks by the Ways and Means Committee before the desired House floor vote.

Call to Action: Connect with your state representative via our grassroots page. Let them know today that long-term funding is important to you and your company!

Get Your Motor Running for Transportation Funding

The long-awaited road funding bill (HB 1002, authored by Rep. Ed Soliday) arrived during the first week of session. It addresses the structural deficit of $1.2 billion per year for Indiana roads. The bill includes many good things that the Chamber supports; it is user-fee based and data-driven. While the bill will have changes during the next four months, we will work to support its basic concepts. The state’s situation: Over the years, technology (that led to better gas mileage) and inflation have combined to erode Indiana’s road maintenance dollars. Also, the last time the gas tax saw an increase was 2003. There will be a major hearing on this bill by the Roads and Transportation Committee on January 25 and the Chamber will be there to formally advocate its full support.

HB 1002 provides for a one-time fuel tax rate increase of 10 cents per gallon on gasoline  currently $0.18), special fuel tax (currently $0.16) and motor carrier surcharge tax (currently $0.11.) It also does the following:

  • Provides for an annual rate increase in fuel tax rates based on an annual index factor
  • Increases alternative fuel decal fees by 50%
  • Establishes a $15 transportation infrastructure improvement fee that applies to all motor vehicle registrations
  • Requires a person who registers an electric vehicle to pay a supplemental registration fee of $150 with an increase every five years based on an index factor
  • Provides that the gasoline use tax is distributed to highway funds over a phase-in period
  • Repeals restrictions on when a tolling project can be undertaken
  • Requires the Indiana Department of Transportation (INDOT) to seek a Federal Highway Administration waiver to toll interstate highways
  • Permits INDOT to approve certain railroad crossing projects and authorizes the Indiana Finance Authority to finance an approved project subject to a maximum annual debt service limit of $10 million
  • Makes various changes to the transportation funding exchange program between the state and counties and municipalities

TECH THURSDAY: The Internet of Things Offers Strong Economic Opportunity for Indiana

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In late September, I had the opportunity to attend the second annual Internet of Things (IoT) conference at the Launch Fishers co-working facility. It was an energetic afternoon with substantial knowledge and information exchange about the future – and it suggests vast economic potential for Indiana.

For those who don’t know what IoT is, Wikipedia defines it as “the internetworking of physical devices, vehicles (also referred to as “connected devices” and “smart devices”), buildings and other items – embedded with electronics, software, sensors, actuators and network connectivity that enable these objects to collect and exchange data.”

The IoT event started with a lunch and welcome by Fishers Mayor Scott Fadness who explained to guests – including legislators invited by the Indiana Chamber – the vision of how Indiana can be a global leader in the IoT field. Lunch was followed by a series of “TED talks” by Indiana industry leaders from manufacturing, agriculture, energy and logistics who shared how the connectivity of devices can improve how Indiana grows, makes and moves things.

Executives from Tom Farms, Delta Faucet, Cummins and other companies all talked about what the future looks like in their business, embellished by IoT technology.

John McDonald, president of CloudOne and chairman of the Chamber’s Tech Policy Committee, said IoT technology has “practical economic uses, ranging from farmers measuring soil samples in real time to logistics companies tracking their fleets and checking for mechanical or efficiency issues.” The Chamber believes IoT has the potential to bolster Indiana’s economic strengths in manufacturing, agriculture, life sciences and logistics.

The Chamber supports programs that advance the ability of Indiana companies to leverage technologies and skills that improve innovation in product development and facilitate manufacturing and production advancements, in order to offer superior products and services to the emerging IoT economy. This is especially true when these companies leverage other Indiana companies as the source for those technologies, skills and innovation.

Through the Indiana Technology and Innovation Council, managed by the Chamber, we will work to encourage the use of all available mechanisms, including tax policy, economic incentives, support for collaboration between Indiana companies and promotion of these efforts on national and international levels.

We believe Indiana has the potential be a national and potentially global leader in helping companies elevate their products for IoT. The impact affects both Hoosier companies that supply Internet of Things technologies and skills, such as data analytics, sensors, networks, software, technology consulting and cloud services, as well as those that consume them to make superior products and services for global markets.

Indiana Technology and Innovation Council Moving Forward

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The Indiana Chamber announced the creation of the Technology and Innovation Council earlier this summer. The goal of the group is to leverage the Chamber’s statewide presence and ability to convene leaders and partners so we can enhance the growth of innovation, entrepreneurship and technology in Indiana with forward-thinking public policies and relevant programming.

Below is an update on the main aspects of the program:

Tech Policy Committee
This committee is in the process of working with leaders of various technology and innovation entities to develop the Chamber’s technology and innovation policy agenda. While many of the policies are updating current policies, such as venture capital incentives, new subject areas are being carefully considered. The committee chairman is John McDonald with CloudOne and vice chairman is Bill Soards with AT&T.

After the committee does its work over the next month, the tech policy agenda for the 2017 legislative session will be affirmed by the Chamber board this November. It will be publically announced at our Technology and Innovation Policy Luncheon on Thursday, December 15.

We hope to augment Indiana’s strong business climate with a renewed focus to better meet the needs of innovators, entrepreneurs and technology-oriented enterprises.

Programs and Trends Committee
Work is underway by this committee to think through what additional programming and information can help accelerate the growth of Indiana’s innovation and technology companies. Indiana has many excellent programs going on around the state and we hope to better connect the dots through the work of this committee. The chairman is John Wechsler of Launch Fishers and vice chair is Kristin Marcuccilli of STAR Financial Bank.

Already, the Chamber has enhanced its technology and innovation communication efforts through its BizVoice magazine and with Chamber members and customers through frequent email communications. It has created the web site, Indiana Chamber Tech, to provide relevant and useful information. Other activities being planned include a technology/innovation road show, a series of peer-to-peer lunch events and an innovation summit. The goal is to help better inform stakeholders around the state with useful programming and information relative to our future economy.

A Worthy Read
One of the most interesting white papers on business I have read recently includes this excellent paper from the Kauffman Foundation titled, A Tale of Two Entrepreneurs. It talks about two different types of businesses (we need both) and some important differences in fostering economic growth. I hope you take a few minutes to read it.

Please contact me directly to learn more about the Tech Council or sign up now.

Road Funding Committee Discussions Ramp Up

9809397An in-depth interim summer study committee on road funding (called FIRSST) held its second meeting last week. This was an input session that focused on how Indiana’s road conditions and funding compare to other states.

There were several informative presentations from several different groups including Conexus and the National Conference of State Legislatures. Points of interest from the discussion:

  • For the U.S., average funding sources for highways and transit are 25% federal, 40% state and 35% local.
  • Indiana’s deficient roads cost $391 per motorist per year. This includes flat tires, bent rims and other costs.
  • Some 16% or 9,965 miles of Indiana’s roads are considered in poor condition; that ranks us third among six Midwestern states.
  • A total of 10.2% or 1,944 Indiana bridges are considered deficient in quality; that ranks us second among six Midwestern states.
  • Investment in road infrastructure is declining, even when adjusted for inflation.
  • There are 54 potential funding sources for road funding ranging from fuel taxes to parking meters.
  • Fuel taxes have not kept up with the infrastructure needs. Automobiles are more fuel efficient and inflation has been eating away the buying power of gas taxes. Indiana last raised its gas tax in 2003 and it is not indexed for inflation.
  • As electric cars become more popular, very few states – including Indiana – impose fees for their use of roads. Of the 10 states that do, the fee ranges from $47.50-$200 per year.
  • Of the 50 states, 36 – Indiana among them – have toll roads.

The Indiana Chamber will continue to encourage the development and implementation of fiscal systems to support the array of transportation infrastructure projects critical to economic growth. The next FIRSST meeting is scheduled for September 29.

Future Road Funding: Smooth or Bumpy?

36601064This summer, as we wander Indiana for work or pleasure, motorists experience both how good and bad Indiana’s road infrastructure is. The real issue is Indiana’s road funding mechanisms are in need of modernization to keep up with today’s demands.

To address the issue short and long term, several months ago the Legislature passed and the Governor signed two important bills on road funding, HB 1001 and SB 67. Combined, the bills did the following:

  • Provided a total of $689 million of additional funding over the next four years to Indiana’s local governments for their road funding needs.
  • Provided an additional $228 for state road funding in 2017. (Funding for this and the above came from a combination of using some of Indiana’s budget surplus, providing revenue from local option income tax collections and directing some of the sales taxes collected on fuel to road funding.)
  • Provided Indiana counties the option to double their wheel tax and for municipalities with a population over 10,000 to establish a wheel tax. If eligible local governments choose to do this, they can raise up to an additional $376 million a year.
  • Established the FIRSST (Funding Indiana’s Roads for a Stronger and Safer Tomorrow) Task Force to develop a long-term plan for state and local roads and bridges, and develop funding mechanisms for the various components of the plan.

The FIRSST Task Force has a lot of work to do before the end of this year. The goal is to present a plan that will set the stage for what might take place during the 2017 legislative session. Its 16 members will verify the costs of road maintenance needs, look at current revenue streams and determine what current and new ideas are viable for the future. This is important given that the primary funding mechanism, the 18-cent-per-gallon gas tax, is not keeping up with the cost to maintain state and local roads, let alone build new ones.

In a recent Chamber infrastructure policy committee meeting, Senators Luke Kenley (R-Noblesville) and Brandt Hershman (R-Buck Creek) indicated their commitment to achieving a solid and sustainable long-term solution during the 2017 session. Given the Indiana Chamber’s Indiana Vision 2025 goal area of “Superior Infrastructure”, we will play an active role in this discussion.

Indy Star: Statehouse Needs Push Toward Government Efficiency

Current economic realities make it even more compelling to overcome the political resistance against making needed changes regarding how communities deliver local government services in the most efficient way. Today’s Indianapolis Star editorial discusses some encouraging leadership around Indiana countered by, in the Statehouse, the reality of partisan politics. Please take a moment to call, write or e-mail your legislators and let them know that you want them to support meaningful efficiency and change with township government during this session.

Find your elected officials here.