Indiana Chamber Assesses Impact of State’s Early UI Loan Payoff

Kevin 51916 UI Loan Payoff Quote

Indiana Chamber President and CEO Kevin Brinegar assesses the impact of the early payoff of the state’s federal unemployment insurance (UI) trust fund loan which occurred in November 2015:

“Employers now have $327 million in additional funds available for other workplace priorities. They can further invest in their organizations and employees, as well as add more jobs, instead of sending that money to Washington as an ongoing penalty for the loan being in place.

“This early payoff, strongly supported by the Indiana Chamber, was a common sense step taken by lawmakers and Gov. Pence to help employers and their employees. It has had among the greatest impacts of any public policy over the last year on the business community.”

Background
The early payoff was accomplished by temporarily borrowing from Indiana’s reserve funds. The Governor announced today that the funds have now been paid back by employers through their regular state UI payments.

Clinton vs. Trump? A Taxing Decision in November

Now that the election process is to the point where the presidential nominees of the two major parties appear clear, it’s a good time to start considering their various tax plans. Although things can change, details will have to be determined and Congress will have its say, below are some of the current proposals from the two presumptive candidates.

Individual Income Tax
Donald Trump proposes just four brackets; Hillary Clinton proposes eight brackets.

trump clinton tax

Deductions
Clinton caps itemized deductions at 28% of the deduction. Trump phases out all deductions except for the charitable deduction and the mortgage interest deduction.

The Alternative Minimum Tax (AMT)
Clinton creates a new minimum 30% rate on individuals earning over $1 million, while Trump eliminates the AMT.

Corporate Income Tax
Trump lowers the top corporate rate to 15%; Clinton has no specific proposal at this time.

Estate Tax
Clinton increases the top estate tax rate to 45% and lowers the estate tax exclusion to $3.5 million. Trump eliminates the estate tax.

Effect of Plans on the Deficit
And as a final note, you may also want to consider how these proposals will likely impact our federal deficit. Trump’s plan is projected to increase the deficit by $9.5 trillion over the next 10 years; Clinton’s is estimated to reduce the deficit by $1.2 trillion over that same period of time.

Teacher Legislation Plus ISTEP Panel Update

Indiana educators are among the best and the brightest, and have the utmost important job of teaching our future Hoosier workforce. Last week was Teacher Appreciation Week across the United States. The Indiana Chamber was proud to support many pieces of legislation to help raise up the teaching profession. Many bills sought to provide ways to ease the teaching shortage issue, provide supplemental funding to educators and provide opportunities for teachers to grow in their profession. We look forward to more opportunities during the 2017 session.

caryl ed

House Enrolled Act 1395 not only sunsets the high-stakes ISTEP exam, but it also creates a 23-person panel which will review and recommend an alternative based on the new federal regulations set forth by the Every Student Succeeds Act. The Indiana Chamber worked tirelessly to ensure that the business community had a seat at the table and we are pleased that Indiana Chamber board member and former board chair, Marilyn Moran-Townsend, was recently appointed by Senate President Pro Tem David Long (R-Fort Wayne). Moran-Townsend serves on the Chamber’s Business Higher Education Forum policy committee and has an incredible background in education, including as former chair of the Indiana Commission for Higher Education and a founding member of the Indiana Education Roundtable. Other appointees include:

  • Nicole Fama – principal of Indianapolis Public School #93; Fama will be chair of the board
  • Dr. Jim Roberts – Batesville Community School Corp. superintendent
  • Chuck Weisenbach – principal of Roncalli High School in Indianapolis
  • Brent Freeman – special education officer for Indianapolis Public Schools
  • Dr. Michelle McKeown – part-time assistant professor of education studies at DePauw University
  • Ayana Wilson-Coles – third grade teacher at Eagle Creek Elementary School in Indianapolis
  • Julie Kemp – principal at Chrisney Elementary School in the North Spencer County School Corp.
  • Wendy Robinson – superintendent of Fort Wayne Community Schools
  • Callie Marksbary – Indiana State Teachers Association
  • Melissa Scherle – Indianapolis Public Schools second grade teacher
  • Edward Rangel – assistant principal at Tindley Genesis in Indianapolis
  • Dr. Scot Croner – Blackford County Schools superintendent
  • Dr. Lynne Stallings – Ball State University professor
  • Jean Russell – literacy specialist at Haverhill Elementary in Southwest Allen County Schools, 2016 Indiana Teacher of the Year
  • Steve Baker – Bluffton High School principal
  • Dr. Kenneth Folks – East Allen County Schools superintendent

Also on the panel: Superintendent of Public Instruction Glenda Ritz, Department of Workforce Development Commissioner Steve Braun, Higher Education Commissioner Teresa Lubbers, Senate Education and Career Development Committee Chairman Dennis Kruse (R-Auburn), House Education Committee Chairman Bob Behning (R-Indianapolis) and State Board of Education member Byron Ernest.

The panel will submit recommendations to the Governor and General Assembly no later than December 1, 2016.

Chamber Releases Vote Scores for Legislators

leg analysisThe Indiana Chamber handed out scores today to legislators for their performance during the 2016 General Assembly. The numbers, released in the organization’s annual Legislative Vote Analysis, are based on voting records on pro-jobs, pro-economy legislation. The 2016 scores ranged from 36% to 100%. 

The purpose of the Legislative Vote Analysis is to keep Hoosiers informed about what’s going on at the Indiana Statehouse and how their legislators are voting on issues vital to the state’s economic future and their own. This report makes it clear which legislators support pro-economy, pro-jobs bills and which legislators do not.

Base scores for each legislator are calculated as a percentage of votes cast in agreement with the Indiana Chamber’s position on the bills included in the Legislative Vote Analysis. Select pro-economy, pro-jobs legislation has been double-weighted to reflect its importance.

As was the case in 2015, a modest adjustment factor (positive or negative) was added to the Legislative Vote Analysis scoring model to factor in very important legislative activities outside of floor votes. These include whether a legislator sponsored/authored these important bills and whether committee chairs held hearings or killed these bills.

In addition to receiving their score, 13 legislators earned a star designation for overall leadership or their significant efforts on issues deemed of critical importance.

“These individuals went the extra mile to move our state forward in some tangible way. Some championed public policy that, while needed, was a tough sell, and others worked their caucus to get vital legislation passed,” offers Indiana Chamber President and CEO Kevin Brinegar.

The majority of the bills included for examination can be traced back to the Indiana Chamber’s Indiana Vision 2025 economic development plan, released in 2012.

Legislators who score 70% or greater for the most recent four-year voting period are eligible for endorsement by the Indiana Chamber’s political action committee, Indiana Business for Responsive Government.

Lawmakers are notified of the Indiana Chamber position and reasoning on the bills in this report through various communications during the legislative session – and prior to key votes being taken. Only floor votes for which there is a public record are used in the Legislative Vote Analysis.

Copies of the Legislative Vote Analysis report are sent to all legislators and Indiana Chamber board members, and made available online for all businesspersons, community leaders and citizens.

This marks the 32nd year the Indiana Chamber has measured state legislators’ voting performance on bills that reflect the organization’s public policy positions.

All scores and the full report are available at the Indiana Chamber’s web site at www.indianachamber.com/lva.

A Big Jump in the Minimum Wage: Will It Help or Hurt Low-Skilled Workers?

Reason.TV’s Nick Gillespie sat down with George Mason University economist Don Boudreaux to discuss raising the minimum wage and its impact on not just businesses, but workers.

Some states and cities have moved to increase their minimum wage to $15, and results have yet to be determined. Boudreaux is adamantly against the increase, however, and expects many workers will lose not only their jobs, but opportunities to gain skills to move up the economic ladder.

Telemedicine a Major Health Issue in 2016 Session

16358656House Bill 1263 (Telemedicine), authored by Rep. Cindy Kirchhofer (R-Indianapolis), was enthusiastically supported by the Indiana Chamber during the 2016 Indiana legislative session. Numerous organizations supported the concept and not one opposed; the Indiana State Medical Association remained neutral. The bill allows physicians, physician assistants, advanced practice nurses that have authority to prescribe drugs and optometrists to prescribe medicine to a patient via telemedicine services.

While everyone supported the concept, getting everyone to agree on the final version was a rocky process. Concerns ranged from existing patient/provider relationships, out of state providers, hospital relationships to standards of care and jurisdiction for medical malpractice. But by the end, the conference committee report had only one vote against in both houses.

Senate Bill 165 (Healthy Indiana Plan or HIP), authored by Sen. Patricia Miller (R-Indianapolis), is the Governor’s measure to repeal the former HIP plan and codify into statute the current HIP 2.0. The Pence administration believes that codifying the current plan strengthens its position with the Centers for Medicare and Medicaid Services for when the new 1115 Medicaid waiver is negotiated.

Opponents believe that codifying the existing plan leaves no room for flexibility. Chiropractic services under the HIP 2.0 plan were added in the House on second reading but removed in conference committee. The bill passed both houses, mostly along party lines with a few exceptions. The Chamber has been supportive of the core principles of HIP and HIP 2.0, offering an alternative to the Medicaid system by providing a power account (similar to an HSA) which encourages individual responsibility in a participant’s medical decisions.

 

Pseudoephedrine and Pharmacists

statehouse picEphedrine, pseudoephedrine and meth received a lot of discussion during session, especially when House Speaker Brian Bosma (R-Indianapolis) came out in November and said that something needed to be done about the state’s meth problem. The Chamber supported HB 1157/SB 161, which included putting individuals with drug-related felonies on the National Precursor Log Exchange (NPLEx) and thus would trigger a stop-sale alert; both bills passed. The Chamber has historically been opposed to making ephedrine products prescription only because of the inconvenience to consumers that need these products and the impacts on businesses that supply them; HB 1390 in its original form would have done that.

During the last week of session, the Chamber provided a written letter to the General Assembly on the conference committee report for SB 80 that was voted on in the House. The letter stated that the conference committee language prohibited consumers from
accessing multi-ingredient, time-released allergy products, such as Claritan-D, Allegra-D, Zyrtec-D and Mucinex-D – the most effective products for consumers suffering from allergies. The multi-use products are less likely to be used in meth than the single-ingredient products referenced in the conference committee report. The letter also suggested how to fix the problem.

Representative Ben Smaltz (R-Auburn) was the House sponsor and although he did not make the changes necessary to fix the conference committee report of SB 80, he did agree that the House-passed third reading version of SB 80 should be concurred upon in the Senate.That essentially amounted to the same thing as the fix and addressed the concerns the Chamber had.

The Indiana Chamber joined CVS, the Consumer Healthcare Products Association, the Indiana Pharmacists Alliance, the Indiana Retail Council, Bayer and Johnson & Johnson in penning a letter to encourage the Senate to concur on the House-passed version of SB 80 because it allowed legitimate cold and allergy sufferers the medicine they need while dramatically reducing sales of pseudephedrine to meth cooks and those they hire to purchase the drugs. Senate Bill 80 allows individuals who have a relationship with a pharmacist to purchase ephedrine and pseudoephedrine products.

It also allows the pharmacist to sell lesser amounts of ephedrine and pseudoephedrine products if there is no relationship. The House version was what ultimately became law.

Lawsuit Lending Legislation Made Big Leap in 2016 Session

10044552The most unbelievable surprise of the 2016 Indiana legislative session ended up being the bill to address the practice known as “lawsuit lending.” At the beginning and throughout much of the session, it was believed by all parties that this would be the year to reach an agreement on the issue. But as both sides began to define terms, it was clear that we weren’t really any closer than in years past.

Lawsuit lending or civil proceeding advance payment transactions, as described in HB 1127, is the practice where a third party finance company loans money to a plaintiff in anticipation of a favorable settlement in a lawsuit. The finance companies justify a high interest rate because if the plaintiff does not win the suit, there is no requirement to repay the amount financed/loaned.

The Chamber has always maintained that this practice has an adverse impact upon the settlement/litigation process. As has been the case previously, Rep. Matt Lehman (R-Berne) was the author in the House and Sen. Randy Head (R-Logansport) was the author in the Senate. The Chamber and coalition members have supported Rep. Lehman’s position and the lawsuit lending industry has supported Sen. Head’s.

Representative Lehman took a different approach this year and attempted to place the transactions under the Uniform Consumer Credit Code (UCCC). Because of the way that interest rates and deferral interest rates are calculated for banks under the UCCC, there was some confusion as to how these transactions would operate for lawsuit lending purposes. To keep a long story short: The industry wanted a $500 document fee on all transactions, 36% interest rate cap and a 36% deferral fee. Due to how their product is financed, it effectually produced an interest rate of 72% – which was totally unacceptable to the Chamber, the Indiana Manufacturers Association, the Insurance Institute of Indiana and other business interests. During conference committee time, Rep. Lehman made several proposals to find common ground.

The night before the last day of session, the Chamber met with Senate President Pro Tem David Long (R-Fort Wayne) to discuss our concerns. He thought a deal might still be struck. Early the final day, a conference committee report was presented and the legal finance industry was opposed to it. By 10:30 a.m., all parties agreed that the bill was dead and we would be back next year to fight even stronger. As a result, most of the coalition members had returned to their respective offices for the day. A little after 11 a.m., the local contract lobbyist for the American Legal Finance Association approached the Chamber to see if there could be a tweaking of the fees if the interest rates were kept lower. Around 12:30 p.m., Rep. Lehman asked the coalition if all of us could live with a 36% interest rate, a 7% service fee, a $250 document fee for loans under $5,000 and a $500 document fee for loans in excess of $5,000. The kicker was that Lehman said that it would be calculated based upon APR (Annual Percentage Rate).

Immediately the Chamber and others said take the deal. Without the APR the deal would have been OK at best, but with APR this was a game-changer. The rest of the afternoon and evening we worked ferociously to get the Senate Democrats to get Sen. Greg Taylor (D-Indianapolis) to sign the conference committee report and get the bill passed. The final HB 1127 passed the Senate 40-10 and was in the last batch of bills to be voted on in the House, passing by a margin of 63-32.

The Chamber wants to thank Jon Zarich, representing State Farm, and Michael Niland and Logan Harrison of the Insurance Institute for their amazing efforts. Their partnership with the Chamber helped make the passage of lawsuit lending possible after six long years.

Positive Developments on Pro-Teacher/Pro-Student Measures in 2016

26256966There were some notable strong successes on pro-teacher/pro-student issues during the 2016 Indiana legislative session. The Next Generation Hoosier Educators Scholarship (HB 1002) allows the Commission for Higher Education to award college scholarships for up to 200 of the best and brightest future teachers. These students must have graduated in the top 20% of their class and received the top 20th percentile scores on the SAT/ACT exams. Upon graduation, scholarship recipients have the requirement to teach in Indiana for five consecutive years.

While the administration set up the program in HB 1002, the Legislature appropriated $10 million in HB 1001. The Chamber advocated for this program to assist with the potential teacher shortages moving forward. We believe that this legislation is a great first step in recruiting strong teachers into the field as well as helping to raise the profession. Strong teachers lead to strong students, which will eventually lead to strong and talented employees.

Also in the good bucket column is HB 1005, which also sought to assist in the teacher shortage issue by providing career pathways and mentorship opportunities for teachers in Indiana schools. The Chamber stressed that mentorship opportunities can help teachers during their beginning years and have significant application for other professions as well. Mentorship is a key tool in attracting and retaining strong employees in the workforce and it is something that the Chamber thinks could and should be utilized to help with teacher
shortages in specific areas such as STEM and special education.

We also supported language in the bill providing supplemental pay for teachers that take on leadership roles in their schools. Another teacher incentive contained in HB 1005 was the creation of a Dual Credit Teacher Stipend Matching Grant Program for eligible educators who teach dual credit courses and are in the process of obtaining or have finished their master’s degree in that subject area. No appropriation was made this year (likely next year during the budget process).

During conference committee time, Chamber-supported language from SB 334 was added into HB 1005 that would allow for a second application period for voucher students. This way if a student were to change schools during the year, it would ensure that the money truly followed the child – specifically during the second semester. Under previous law, should a student change to a different voucher school (for any reason, including parent’s job relocation, divorce, dropout, expulsion or simply to provide a better educational opportunity or fit for that child), they lose that voucher for the remainder of the school year. By contrast, if a traditional public school student were to transfer to a different traditional public school, the money follows the child for the second semester. The Chamber strongly advocated that no child should be treated any differently based on their school choice.

Opponents argued feebly that the bill was an expansion of the voucher program, but the Chamber stressed that it was merely providing students with fair access to funding for their education and did not change any eligibility requirements. Should a child need to transfer schools – for whatever reason – they should have a right to be educated and have funding follow them appropriately. Language from SB 334 regarding background checks and student safety was also added to the bill calling for a child protection index check requirement to the current system of background checks for new employees of school systems.

Specifically, the language requires that the Department of Child Services must notify a school employer if a potential employee has ever been the subject of a substantiated report of child abuse or neglect, and states that confidentiality agreements between teachers and employers moving forward can no longer protect a former employee regarding any substantiated report of child abuse or neglect.