Indiana Businesses: What Could You Do With an Additional $126 Per Employee?

That is the savings – $327 million statewide – you will realize if the state temporarily advances sufficient funds to pay off the federal unemployment insurance loan that has been in place since November 2008.

Business Savings with Early Loan Payoff:

  • 10 employees – $1,260
  • 25 employees – $3,150
  • 50 employees – $6,300
  • 100 employees – $12,600
  • 500 employees – $63,000

Sign the Petition to Governor Pence today! Ask Governor Pence to execute an early payoff of the federal unemployment insurance loan.

The State Budget Committee will consider authorizing this action on Oct. 16. Governor Mike Pence must make a final decision before Nov. 9. The approximately $250 million temporary advance would be reimbursed by the end of fiscal year 2016 through collections of existing state unemployment taxes. Once repaid, the funds used to eliminate the outstanding penalty will be available to be used for other priorities.

The decision is straightforward: have additional funds to invest in your organizations and employees – or send the money to Washington as an ongoing penalty for the loan being in place.

State leaders need to hear from the business community – employers and employees. Share this with your team members and encourage them to “sign” the petition.

If you wish to contact the governor’s office directly, please do so by calling (317) 232-4567. If you have a question and/or an interest in publicly stating your support, contact the Indiana Chamber’s Mike Ripley (317-264-6883 or

Medical Malpractice in Spotlight in Study Committee

The Courts and Judiciary Interim Study Committee has been charged with looking at Indiana’s medical malpractice (med-mal) system. The statute was written in 1975 to protect the health of the citizens of Indiana by preventing a reduction of health care services. Prior to the enactment, seven of the 10 insurance companies writing med-mal business at the time either ceased or limited writing the insurance because of unprofitability. Premiums for med-mal skyrocketed at that point. In some cases, physicians were hard pressed or unable to purchase coverage. Likewise, services were discontinued in some locales.

To stabilize the market, the Med-Mal Act created a medical review panel consisting of an attorney and three health care providers. The parties agree to a panel chair, each party chooses one health care provider to be on the panel and the two health care providers choose a third provider to fill out the panel. Parties send submissions to the panel and the providers review the information and determine if there was malpractice. The panel makes an opinion based upon whether or not the provider failed to comply with the standard of care; whether the conduct complained of was a factor of the resultant damages; and whether the health care provider should be reported to the applicable licensing agency. The medical review panel must render its decision before any court action may take place, unless the claim is less than $15,000 or both parties agree to bypass this step.

The system has damages capped to a patient for an act of malpractice at $1.25 million. That cap has been raised twice since 1975. The system is voluntary, but to participate in the protections of the act, physicians purchase a commercial insurance policy to cover the first $250,000 and pay a surcharge to the Patient’s Compensation Fund (PCF) to cover the remaining $1 million in potential liability. Surcharges vary based upon the specialty of the provider. In 2014, nearly $138 million in claims were paid from the PCF.

The Courts and Judiciary Interim Study Committee has entertained testimony on two separate occasions. The debate now concerns whether or not the caps on med-mal need to be raised for the first time since 1999. The balancing act is between trying to maintain the med-mal system in this state, with maintaining access to care and low premium costs for physicians, and the fear of having the Indiana courts determine the system unconstitutional because the caps haven’t been raised in over 15 years. The committee is also entertaining discussion on the consideration of increasing the bypass threshold (currently $15,000) of the medical review panel – regarding those claims exempt from the medical review panel process.

Committee chairman Sen. Brent Steele (R-Bedford) has asked committee members to review the documentation presented and offer proposals to improve the process. The Indiana Chamber expects there will be a proposal for some increase to the cap.

Political Talk Here, There and Everywhere

American politics

This column by Indiana Chamber Director of Publications and Social Media Matt Ottinger originally appeared in the Inside INdiana Business newsletter, Inside Edge

At a recent event I attended, the conversation among my tablemates turned to politics – namely the late September Republican presidential debate on CNN. Most of my fellow attendees casually mentioned their disdain for the spectacle. When it was my turn to comment, I simply stated, “I love it. I’m not proud of that, but I do.”

Whether it’s Donald Trump’s bombast and “Mean Girls”-style insults, Chris Christie’s bluster and scolding or Rand Paul’s visible contempt for having to be part of the charade, I can’t get enough. For me, it’s like I’m swimming in a barrel of Tropical Skittles next to a keg of Mr. Pibb during a binge watching session of “House of Cards” – an overdose of disgusting, shameful goodness, and I’m simply helpless to its siren song.

It’s been intriguing watching our Midwestern neighbor and former Congressional budget hawk John Kasich strike the moderate chord, while projected frontrunner Jeb Bush struggles to meet lofty expectations. And then there’s Scott Walker. Poor, poor Scott Walker, who disappeared from the race faster than a cheese curd at a mouse convention in Milwaukee.

Granted, politics can devolve into a game at times, but it mustn’t be forgotten that the political world greatly impacts the business community. That’s why our political action committee, Indiana Business for Responsive Government, always has boots on the ground impacting statewide races. It’s also why the Indiana Chamber takes an increasing number of business leaders to Washington, D.C. annually during our D.C. Fly-in. We’re grateful to Indiana’s Congressional delegation for meeting with our members and guests to discuss the issues critical to their businesses and economic growth in our state.

Furthermore, due to my personal affinity for the craft, it was quite a pleasure speaking with famed politicos James Carville and Karl Rove for our most recent edition of BizVoice magazine. The Q&A serves as a preview to the duo’s upcoming appearance as keynote speakers at the Indiana Chamber’s 26th Annual Awards Dinner on Nov. 4.

During the conversations (which took place in mid-July), I asked their perspectives about the opposition’s outlook on the 2016 presidential race:

Rove on if Sen. Bernie Sanders actually has a chance to win the Democratic Party’s nomination: “There’s substance, but the problem is that while you have a very liberal turnout in the Iowa caucuses, and New Hampshire is a more liberal state, there aren’t a lot of Burlingtons and Benningtons and Berkeleys and San Franciscos. There are a lot more Indianapolises and Evansvilles. While he runs well with the hard left, if you’re not very liberal, he’s not your cup of tea. (Clinton) will be the nominee, but it won’t be as easy as people think.”

Carville on if the attention to Trump’s bellicosity is a danger to the Republican brand (at the time of the interview, Trump had recently made statements about Mexicans crossing the border and raping women): “Yes I do. The reason is there are a considerable number of Republicans who agree with him. It’s exposing there are people out there who believe that. That’s a part of that party that is not going to go away with time. When he goes away, somebody will pick it up again.”

Trump, however, still leads national polling, so he continues to resonate with a portion of the country, although prognosticators are predicting his impending demise.

If pressed to make a prediction this early (and it’s so early I’ll likely regret it), I’d forecast a Marco Rubio vs. Hillary Clinton showdown next fall.

In early November, Carville and Rove will offer their expert opinions on the presidential race and politics. A few tickets still remain for the event and can be purchased online.

It will be a great evening of banter, insights and celebration of the business community; we hope to see you there!

Attorney General Rules on A-F Grades for 2015

In July, we discussed Superintendent Glenda Ritz and the Department of Education’s (DOE) position on suspending A-F grades for 2014-2015, or potentially utilizing a “hold harmless” proposal that would assign the better A-F grade between the 2013-2014 year and the 2014-2015 year due to the potential for lower scores as a result of the newly enacted educational standards. State Board of Education members, however, had significant concerns over Ritz’s proposal and made a recommendation that Indiana Attorney General Greg Zoeller’s office review the potential options and give a legal opinion as to which option, if any, would be best for Indiana.

In early September, Zoeller’s office released an informal opinion that advised that the “hold harmless” option would not be supported by current statute and rules. In order for that provision to be legally sound, the General Assembly would have to change the law themselves.

As you may recall, this is not Ritz’s first time trying to pause accountability for students and schools. The Indianapolis Star recently quoted her stating, “Tests never teach you anything.” The Indiana Chamber wholeheartedly disagrees with her statement and finds that testing and accountability are critical for students and schools. Testing is imperative to understanding what a student knows and issues with which they may still struggle. Having strong, accurate and transparent accountability measures means that we can accurately predict Hoosier student progress, assist teachers in where students are struggling, as well as compare and contrast how schools are performing to their peers around the state.

A Recap of the Sept. 16 State Board of Education Meeting

The State Board of Education met September 16 with an extremely full agenda. Highlights include the announcement that despite ISTEP grading delays, school A-F scores will be released publicly in January. Despite pushback from the DOE, the State Board and legislators expressed concerns that the results need to come out as soon as possible. Indiana House Ways and Means Chairman Tim Brown (R-Crawfordsville) sent a letter stating that if grades were not released before January 31 – the deadline for when districts must give performance bonuses for teachers – that the bonus money could be reverted back to DOE and not to the teachers. This prompted the State Board to pass a resolution to have the grades released in January by a vote of 9-0, with Superintendent Ritz abstaining.

The State Board also discussed the new high school diploma proposals. Many parents and educators spoke publicly at the meeting to express their concerns that the current proposal for three diplomas would make graduating students with special needs much more difficult. The reasoning was that increasing math and science for the Workforce Ready diploma option would make it that much harder for these students to graduate. Parents and educators requested that the General Diploma option be kept in the proposal. As a reminder, the Commission for Higher Education has already approved the proposal and must also be voted on by the Indiana General Assembly in 2016.

Property Tax Assessment Appeal Issues Continue

Last session, county officials sought drastic changes to Indiana’s property tax assessment methodology in reaction to two decisions from the Indiana Board of Tax Review (IBTR) involving “big-box” retail stores (e.g., a Meijer and a Kohl’s store). Officials complained that assessment appeals were being wrongly decided because the IBTR allowed the consideration of the sale price of like buildings that had been closed and were vacant at the time of the transaction as evidence of the value of the operating stores. Assessing officials called these transactions “dark sales” and contended such sales should be precluded from being considered in determining the assessment of like structures that remain open and occupied by large retail entities. The legislative result was something of a standoff between county officials and affected taxpayers. The ultimate legislation (SB 436) left a lot to be desired since the interested parties maintained such disparate viewpoints. They were – and remain – fundamentally divided on how real estate should be valued under Indiana law.

The issue came to the forefront again last month when the IBTR issued another decision that resulted in a significant reduction to a large commercial entity; this time, a CVS Pharmacy store in Bloomington. Interestingly enough, this case did not involve a “big-box” and was not based on the application of “dark sales” (even though you would have thought so from the way it was being publicly described by many.) Nevertheless, it was cited as another case where the IBTR had somehow gotten it wrong and was making a bad decision.

The situation essentially reveals: Assessors and county officials believe that large national chains should be taxed more because they are large national chains (and refuse to acknowledge the state of the law which just doesn’t support their higher assessments.) The IBTR has merely been doing its job, applying case law that has developed from Tax Court decisions issued since 2010 and before.

What’s more, assessors and county officials do not want to assess the property based on its fair market value, they want to assess it based on the value of the business operations that take place on the property — what I call “value to the user.” Property tax is supposed to be a tax on the value of real estate, not a tax on the investment value that real estate has to the owner. This debate arises out of the statutory and administrative rule definitions that govern our assessment system. Indiana defines true tax value as something different than the market value-in-exchange (what the property could sell for); instead it creates a hybrid standard referred to as “market value-in-use”. This hybrid was created to protect some properties from higher taxes. The best example is when a highly valuable piece of prime commercial real estate is actually used for agricultural or residential purposes.

But now there is a movement to interpret market value-in-use as a means for taxing the value the property has to its specific user, i.e., the national retail chain owner. This is not only subjective, unfair and inequitable; it is unworkable. It would result in nearly identical buildings being assessed at widely differing values based on the financial status and circumstances of the particular owner. Such a standard is contrary to our Indiana Constitution and would effectively undermine the integrity of our entire assessment system.

It is an important issue and appears it is going to be taken back up next month by the Interim Committee on Fiscal Policy, which has scheduled meetings for October 7, 13 and 21.

Sen. Coats to Share Powerful Insights at Mary Tucker Jasper Series on Oct. 2

dan_coats2Sen. Dan Coats recently announced his retirement from the U.S. Senate following an esteemed career representing Hoosiers in Washington, D.C.

If you’d like to hear him speak before he exits the Senatorial stage, Coats will be the featured speaker at the Mary Tucker Jasper Series at the Columbia Club in Indianapolis on Friday, Oct. 2.

The series, which recognizes outstanding civic engagement and exceptional public leadership, is the signature event of the Benjamin Harrison Presidential Site — and 2015 marks its 10th anniversary. Over the past decade it’s featured a wide array of nationally recognized speakers, including Brian Lamb, Michael Beschloss and Richard Norton Smith. (The series was established through a generous gift from the Mary Tucker Jasper family in 2005.)

Event Details

Tickets range from $155 (dinner) to $200 (dinner and VIP reception)

5:30-6:30 p.m.: VIP Reception with Sen. Coats in the Columbian Suite
6 p.m.:  Cocktail hour
7 p.m.: Welcome and dinner in the ballroom
8 p.m.: Powerful insights from Sen. Coats

Tickets are limited, and are only available until the end of the day Monday, Sept. 21. Don’t miss this opportunity to hear an accomplished statesman as he prepares to leave office! Register online or call Ashleigh Graves-Roesler at (317) 631-1888 for more information.

Chamber Participates in Free Community College Discussions in D.C. and Tennessee

The Indiana Chamber was recently asked to attend a meeting with U.S. Secretary of Education Arne Duncan in Washington, D.C. to discuss the Obama administration’s plan for free community college, modeled after Tennessee Promise. Secretary Duncan reached out to seven states and Indiana was the first to participate in this forum.

Thirty leaders from Indiana – from the business community, higher education and community foundations – came to the White House to discuss the plan as well as the environment for such a plan being brought to Indiana. At this point in time, the Indiana Chamber has no position on the President’s proposal, but we would like to ensure that students have some sort of “skin in the game” and have significant questions on how this program would be funded.

The Chamber was then invited to a follow-up meeting in Chattanooga, Tennessee this past week to learn more about Tennessee’s successful program – Tennessee Promise – which provides two free years of community college to all Tennessee high school graduates. This program involves a significant mentoring and service program with substantial buy-in from the employer community across the state. The group visited Chattanooga State Community College, the Volkswagen Training Academy, the Walker Institute, as well as met with faculty and administration representatives from Tennessee community colleges, legislators and agency heads to discuss higher education issues in their state.

Chamber Convenes Infrastructure Leadership to Discuss I-65, Long-Term Solutions

10049160The Indiana Chamber recently brought together a trio of the state’s top leadership on infrastructure issues to discuss Indiana’s current maintenance and funding challenges, including the closure of Interstate 65 near Lafayette due to emergency bridge repairs, and long-term solutions to an estimated $1 billion annual road and bridge maintenance funding gap.

Indiana Department of Transportation (INDOT) Commissioner Brandye Hendrickson, House Ways and Means Committee Chairman Tim Brown M.D. (R-Crawfordsville), and House Roads and Transportation Committee Chairman Ed Soliday (R-Valparaiso) appeared before the Chamber’s Infrastructure Policy Committee to share their views and hear the viewpoints of the state’s business leadership.

INDOT Commissioner Hendrickson stated that the I-65 closure represented significant logistical and engineering challenges and economic costs, but that the bridge repairs should be completed and the interstate back online by mid-September. She stated that INDOT was doing all it could to expedite the process, but that the bridge failure pointed to the state’s maintenance needs. A statutorily required study of potential funding mechanisms has been underway and will be made public at a legislative interim study committee this fall, most likely in October.

Both Brown and Soliday agreed that the state needs to commit for funding to road and bridge maintenance – and that was the case prior to the I-65 bridge incident. Brown suggested that revenue projections look pretty good for the $200 million appropriated to the 2020 fund to be deployed later this year, but acknowledged that more needed to be done – most likely in 2017, the next budget-writing session of the General Assembly. He also said he was open to using the $500 million in the Next Generation Trust Fund for immediate infrastructure maintenance needs. Brown would like to see a “consistent funding stream on an annual basis for transportation infrastructure” enacted in the future, but left all options on the table pending review of the INDOT study.

Soliday praised the INDOT study and described it as a “tool to look at a number of funding mechanisms and options”; he plans to hold a study committee hearing in October to review the tool and various options. Soliday said that the average Hoosier driving 12,000 miles/year pays about $108/year in taxes for transportation infrastructure and described that as a “bargain” compared to the average monthly cell phone or cable TV bills consumers pay. Both legislators were supportive of public-private partnerships and progress on existing road projects; they expressed frustration that county wheel taxes had not been more fully utilized to address local funding needs for local and county roads.

It was clear from the panel discussion that it is a question of when and how the transportation funding gap will be addressed, not “if” it will be addressed. Most likely, these issues will begin to be discussed in-depth in the 2016 legislative session with some supplemental funding being found, but that a longer-term solution will be waiting until the budget-writing process in 2017.

VIDEO: Time to Move Forward and Improve Indiana’s Infrastructure

Indiana Chamber President Kevin Brinegar discusses the importance of improving Indiana’s infrastructure. 2016 looks to be the “year of infrastructure” at the Statehouse, and Brinegar asserts “Indiana can’t wait for Washington to act.”