Indiana Chamber Unveils Top Legislative Priorities for 2017

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Senate Democratic Leader Tim Lanane (right) speaks during Monday’s Indiana Chamber Legislative Preview. He was joined during the panel discussion by Senate President Pro Tem David Long, as well as House Speaker Brian Bosma and Minority Leader Scott Pelath. Our VP Caryl Auslander moderated.

Long-term transportation infrastructure funding, expansion of state-funded preschool to children from low-income families and strategies to reduce the state’s smoking rate are among the Indiana Chamber of Commerce’s top priorities for the 2017 session.

These objectives were announced at the organization’s annual legislative preview in Indianapolis today. The event sponsor was Ice Miller LLP.

“Based on studies, reports and simply travelling across the state, it’s pretty apparent that what we desperately need is a long-term, sustainable, transportation infrastructure funding plan,” offers Indiana Chamber President and CEO Kevin Brinegar.

He believes whatever strategies are ultimately settled on to fund the state’s road and bridges, two factors must be taken into consideration.

“We need to completely fund both maintenance needs and important new projects, and ensure that every user pays their fair share.”

Specific funding strategies the Indiana Chamber could support include: indexing the fuel excise taxes/fees to inflation; raising fuel excise taxes/fees; charging fees for alternative-fuel vehicles (which aren’t subject to the regular fuel tax); tolling a major interstate; and dedicating all of the sales taxes on fuel to infrastructure (the current model allots a penny with the other six cents going to the state’s general fund).

Brinegar notes that the Indiana Chamber would support replacing any revenue lost to the general fund with another revenue source so that the general fund is left whole.

Education is also high on the organization’s agenda.

“We are encouraged that virtually everyone involved sees the need to increase state-funded preschool,” Brinegar begins. “The Indiana Chamber will be advocating that disadvantaged youngsters take priority for the state’s limited dollars.

“We want to see legislators focus on fiscal responsibility, ensure preschool programs are of high quality and adopt a mixed delivery model that includes public schools, Head Start programs, licensed family and center-based childcare, as well as community-based organizations. All of those things are vitally important.”

The Indiana Chamber is part of the All IN 4 Pre-K coalition.

Separately, the Indiana Chamber is supporting suitable testing for students and accountability measures for all involved in the education process.

“Clearly there have been issues with ISTEP testing and the communication of result expectations based on the state’s new college and career-ready standards,” Brinegar says. “But the fundamental importance of measuring students, teachers and schools remains. That’s how we can predict student progress, rate teacher effectiveness and compare and contrast school performance relative to state and national peers.”

Indiana ranks 44th in the nation for highest percentage of smokers. Brinegar stresses that the increased health care costs associated with this level of smoking has the attention of employers.

“These workers are less healthy, have higher insurance premiums and miss more days on the job – and some are not able to work at all.”

The Indiana Chamber, a member of the new Alliance for a Healthier Indiana, is backing a comprehensive approach to reducing the state’s smoking rate. The proposal includes: raising the price of cigarettes via a tax increase; funding a more robust smoking cessation program; increasing the smoking age from 18 to 21; and repealing special privileges for smokers (that prohibit employers from asking possible new hires if they smoke).

“Right now, Indiana is spending substantially more on smokers with health issues who are on Medicaid than it is taking in via cigarette tax revenues. For every pack sold and taxed at 99.5 cents, the state spends at least $15.90 in related health care costs,” Brinegar states. “Obviously that’s not a sustainable tradeoff and needs the state’s attention.”

In the summer, the Indiana Chamber more closely aligned with the state’s technology industry, forming the Indiana Technology & Innovation Council to facilitate better communication and coordination among interested parties.

According to Brinegar, a key focus is public policy so technology leaders can present a strong, unified voice at the Statehouse. Out of the gate, the goal is to “make technology innovation an integral part of the state’s identity.”

Brinegar says: “Indiana is already fostering an impressive entrepreneurial spirit and becoming a technology hub in the Midwest. But we need to better support our technology successes and build on them. After all, our technology efforts now provide tremendous support to the agriculture, logistics and manufacturing sectors in the state – three of our main cogs.”

The Technology and Innovation Policy Summit on December 15 will unveil all the council’s legislative goals.

A complete rundown of the Indiana Chamber’s 2017 key legislative initiatives (top priorities and additional areas of focus) is available at www.indianachamber.com/priorities.

Also at the legislative preview event, five state legislators were honored as Indiana Chamber Small Business Champions “for their hard work and dedication to improving Indiana’s small business climate.” This award is based on voting and advocacy during the past legislative session.

The 2016 Small Business Champions are: Sen. Travis Holdman from Markle, District #19; Sen. Tim Lanane from Anderson, District #25; Rep. Matt Lehman from Berne, District #79; Rep. Karlee Macer from Indianapolis, District# 92; and Rep. Ed Soliday from Valparaiso, District #4.

Recap of the Indiana Chamber’s Top 8 legislative priorities:

  • Support establishing a long-term sustainable funding stream for the state’s roads, bridges, etc.
  • Support the expansion of publicly-funded preschool initiatives for children from low income families
  • Support suitable testing for students and accountability for all involved in the education process
  • Support comprehensive approach to decreasing the state’s smoking rate
  • Support a statewide water policy to assure future resources and our economic prosperity
  • Support making technology innovation an integral part of the state’s identity
  • Support maintaining and enhancing our attractive tax climate
  • Support a work share program that will allow employers to maintain a skilled stable workforce during temporary downturns

Go Vote! Then Let’s Move from Politics to Policy

Indiana Chamber of Commerce President and CEO Kevin Brinegar comments on the election aftermath:

“We probably have just witnessed the most bizarre and bruising election of our lifetimes. It’s critical to move on quickly from any bitterness of the campaigns or results and come together as a state and nation.

“We need lawmakers to concentrate on the business of governing and moving our economies forward. Let’s focus on producing positive outcomes and Indiana continuing to set an example as a state that gets things done.”

Beyond the Bicentennial: Our Letter on Infrastructure, Energy and Telecommunications

The following is the third in our series of Beyond the Bicentennial letters, addressed to gubernatorial candidates. Read them all at www.indianachamber.com/letters.

Dear Mr. Gregg and Lt. Gov. Holcomb:

For Indiana to be the state we all want it to be – one that inspires business location and expansion, brings good-paying jobs to Hoosiers and allows for a high quality of life – a solid infrastructure framework must be in place that reflects both present conditions and is prepared for future developments.

The Superior Infrastructure economic driver in our Indiana Vision 2025 plan champions that belief, with goals regarding transportation, energy, water and telecommunications – all things sometimes taken for granted but inherently critical to running a business and enjoying the comforts of daily life.

Reliable roads and bridges doesn’t seem like a lot to ask for (especially for the Crossroads of America), yet it takes significant investment to keep them functioning, make enhancements and build anew. Frankly, our state has not done enough in recent years and has thus fallen behind.

In 2016, the state Legislature opted to provide short-term funding with a task force set up for the next phase. We all should know at this point – based on studies, reports and simply travelling across the state – that what Indiana desperately needs is a long-term, sustainable, strategic policy plan. One that lasts decades, not a few years or election cycles. And above all, it must be based on the principles that enough revenue is raised to completely fund both maintenance needs and important new projects, and that every user pays their fair share.

There are a number of strategies that should be on the table – any or all of which the Indiana Chamber could support:

  • Index fuel excise taxes/fees to inflation
  • Raise fuel excise taxes/fees
  • Charge fees for alternative-fuel vehicles (which aren’t subject to the regular fuel tax)
  • Tolling a major interstate
  • Dedicate all of the sales taxes on fuel to infrastructure (the current model allots a penny with the other six cents going to the state’s general fund), and replace the revenue lost to the general fund with another revenue source so that the general fund is left whole

But, realistically, how we get there matters far less than advancing to the point where we have a robust transportation fund. It’s time to finally address this in 2017 – hopefully in a bipartisan way – before it becomes a crisis.

For decades, many companies have located in Indiana because of its adequate, reliable and affordable supply of electricity. But now that coal – Indiana’s most plentiful energy source – has come under frequent attack by the Obama administration, affordability is starting to go out the window. And how long will it be before businesses and jobs go with it?

Unfortunately, Indiana is to some degree at the mercy of the incoming president and the Environmental Protection Agency. However, we can take additional proactive steps at the state level to combat their actions against coal.

One avenue is to focus on diversifying Indiana’s energy mix with an emphasis on clean coal, natural gas, nuclear power and renewables. Development and execution of a statewide energy plan (which does not currently exist) is essential.

Turning the attention to water, we need to finish the good work that stemmed from the Indiana Chamber’s 2014 water resources study and legislation carried by Sen. Ed Charbonneau and others to develop and implement a statewide water resources plan.

We must ensure that future water resources are available – our ability to effectively compete with other states depends on it. And we are approaching the point where research and data collection should soon transition to action. Leadership must be shown by the next Governor to help spearhead the process.

While the need for water has been obvious since the beginning of time, the advent of broadband and its economic significance is a much more recent development. It wasn’t that long ago that broadband was spoken about only in terms of faster and more reliable internet entertainment. But today, and in the future, its business, medical, security and quality of life impacts are paramount.

Legislation in 2015 that created the Broadband Ready Communities Development Center assists rural locales in working through the barriers they might have to broadband investment by a provider.

But not enough is happening and not quickly enough. We must find more ways to bring the most rural parts of Indiana up to date technologically to help reverse their downward population and economic trends.

That sentiment – being more aggressive – easily could be said for all of these infrastructure components. If elected Governor, we strongly encourage you to make that shift and put a greater priority on these vital issues.

Sincerely,

Kevin M. Brinegar
President and CEO
Indiana Chamber of Commerce, representing 24,000 members and investors statewide

Logistics, Infrastructure Take Center Stage at Summit

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Hoosiers don’t take lightly the title “Crossroads of America.”

It’s a moniker we’ve earned honestly: The state is in the heart of the Midwest and is one of the top manufacturing states in the country. Going hand-in-hand with manufacturing success are logistics and distribution, and the ability for Hoosier companies to move their goods efficiently and through cost-effective means.

We move products by sea, rail, over the road and through the air to national and global locations. More than 700 million tons of freight is moved annually in Indiana, according to the Indiana Department of Transportation.

As part of the ongoing Beyond the Bicentennial campaign, the Indiana Chamber of Commerce will release an open letter detailing the necessary policy positions for advancing the state’s Superior Infrastructure, as outlined in the Chamber’s long-range economic development plan Indiana Vision 2025. The letter, to be published on Sept. 27, will be the third in a series of four letters addressed to the major party gubernatorial candidates. Each letter details policies impacting the four drivers of Indiana Vision 2025. Additionally, the Indiana Logistics Summit will return to downtown Indianapolis on Nov. 16-17.

Keynote speaker Paul N. Jaenichen, Sr., United States Maritime Administrator, will address attendees on Nov. 17. Jaenichen was appointed to his position by President Obama in 2014 and is a retired career naval officer. He was a nuclear trained Submarine Officer in the U.S. Navy for 30 years, and will be speaking about the National Maritime Transportation Strategy and Marine highway projects.

New to the summit will be a series of educational breakout sessions. These will feature speakers on topics such as: rail, air cargo, barge and trucking industries; going global; innovation; policy; and workforce.

Early discounted registration is open until Sept. 30 (though registration will continue after that date). Visit the web site at www.indianalogistics.com for more information and to register.

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.

Brinegar: We Commend INDOT on I-69 Route

i69The Indiana Department of Transportation (INDOT) announced today that the preferred route for Interstate 69 section 6 between Martinsville and Indianapolis is the State Road 37 corridor. Indiana Chamber of Commerce President and Hoosier Voices for I-69 Chairman Kevin Brinegar offers his comments:

“We support INDOT’s decision that the State Road 37 corridor is the best alternative for completing the I-69 extension and it will be the best investment for Hoosiers. The corridor requires far less new construction than the alternatives, impacts the fewest homeowners and has the most consensus among all interested parties.

“We commend INDOT on the thorough selection process and the analysis used to come to this decision.

“While we’ve made much progress on the I-69 extension – most recently with the opening of Section 4 in Greene and Monroe counties in December – there is still much to be done from the Bloomington area up to Indianapolis. The state must remain committed to funding this important project and seeing it through to completion.

“In the not-too-distant future, I-69 will run continuously from Evansville to Fort Wayne and beyond. That will provide many more Hoosiers with better road access, leading to reduced travel time. And that also is very attractive for businesses, making Indiana an even more viable hub for companies and new jobs.”

The 2016 Legislative Session: Some Noteworthy Shots Made

Silhouette of Teen Boy Shooting a Basketball at Sunset, copy space

With the NCAA basketball tournament in full swing and baseball season just around the corner, slam dunks and grand slams are both center stage. Neither of those terms, however, can be used to describe the 2016 Indiana General Assembly session. We’ll have to settle for a solid jump shot or maybe a line drive double in the gap.

The number one priority for the Indiana Chamber and its business members was enhanced funding for roads and transportation infrastructure. A total of $1.1 billion, when counting money for local governments, is a strong start. What’s even more important is the commitment legislators made to address longer-term needs in the 2017 budget-writing session.

All four legislative caucuses and the governor’s office offered plans and spent considerable time working toward solutions. That is an excellent sign of even better things to come. In the education arena, the disastrous ISTEP test implementation in recent years led to several needed pieces of legislation. Teachers and schools will not be negatively impacted by the 2014-2015 test results, but all-important accountability remains in place and a summer panel – with the Indiana Chamber at the table – will determine a more suitable testing future for our state’s students.

Other positive legislative results included funding the third Regional Cities program, scholarships for prospective top-of-their-class teachers, a long-sought solution to the unregulated lawsuit lending industry and saving hundreds of millions of dollars with more appropriate property tax assessments of large retail facilities (aka “big box” stores).
Unfortunately, there were also two significant missed opportunities. Indiana must be seen as a welcoming place for all in order to retain and recruit top talent, new business investment and tourism. Failing to pass civil rights legislation doesn’t put Indiana in the strong position it could have been, or arguably needs to be. While this proved a bridge too
far for legislators to cross in this election year, all of our state leaders must find a way going forward to work together to craft a solution.

Despite bipartisan support, implementing a work share program barely even got out of the starting gate. Work share would benefit employees, employers and communities when the next economic downturn occurs. At the request of the Indiana Department of Workforce Development (DWD), the Indiana Chamber partnered with them to commission an independent study of why a work share program is needed. The Chamber also took the extra step of identifying viable funding options for the program’s administration. However, DWD still was unable to get on board. Until they do, this policy will, unfortunately, face an uphill climb.

If these last two items had been added to the plus column, we might just be talking slam dunks and grand slams. Still, there will be another game in town next year, and the Chamber will be back at it – pushing these policies and others that support making Indiana a more prosperous place for employers and their employees.

Read further analysis from Brinegar on several of these issues in this summary

Road Funding Bills, Regional Cities Funding Headed Down to the Wire

?????????????????????????????????????????????????????????????Several bills attempting to address Indiana’s transportation infrastructure and regional economic development are headed toward eleventh hour conference committee deliberations where differences in approach between House Republicans and Gov. Pence/Senate Republicans will need to be hashed out. It is a high-stakes game in an election year.

House Bill 1001 is the House Republicans’ original effort to create a long-term, sustainable and dedicated funding source for Indiana’s roads, highways and bridges. It attempts to address a near $1 billion annual maintenance shortfall through indexing existing fuel taxes to inflation, dedicating the sales tax on fuel sales to infrastructure (vs. the state’s general fund), increasing taxes on cigarettes to refill the state’s general fund coffers (which support the state’s Medicaid program), imposing fees on alternative fuel vehicles, and supplying local units of government with expanded fiscal tools and taxing authority for roads. The Indiana Chamber worked with legislators on this bill and supports this comprehensive, data-driven approach.

Senate Bills 67 and 333 (as they started in the Senate) reflect Gov. Pence’s and Senate Republicans’ desire to avoid any tax increases for roads this year and delay any major decisions on road funding until the 2017 budget year, while also giving some money and tools to local units of government. At best, these proposals are short-term fixes to a long-term problem and the Chamber prefers the House Republican legislation.

Add to this mix Gov. Pence’s request for an additional $42 million for a third Regional Cities grant award, and you have plenty of fodder for lengthy, contentious negotiations with a March 10 deadline looming. Leadership from both chambers has been meeting with the Governor and his staff to hammer out a compromise proposal. As of this writing, negotiations are occurring behind closed doors and in caucus discussions with both sides remaining far apart. Meanwhile, Democrats in the Legislature watch as Republicans battle among themselves over the “right” compromise package.

We anticipate that the third Regional Cities grant will be funded in some way and that some short-term road funds and expanded authority for local governments will emerge. Whether or not the tax increases in HB 1001 survive the negotiation is an open question. The Chamber will work with all parties to address the state’s road-funding needs in the most rational and comprehensive way possible.

Senate Committee Amends House Roads Bill; Another Task Force Created

30449450The political wrangling between the House and Senate over the roads bill is in full swing. This bill has been substantially altered by the Senate Appropriations Committee at the direction of its chairman, Sen. Luke Kenley (R-Noblesville). Essentially, Kenley’s amendment removes all tax increases and decreases from the bill and establishes a task force to further assess the state’s needs for road funding – putting off difficult decisions to 2017.

Meanwhile, the original language of HB 1001 was inserted into SB 333, the Governor’s roads plan. Both bills are set up for conference committee negotiations. We expect the discussions and subsequent vote on this one will go down to the wire.

The Indiana Chamber has worked with legislative leaders as they attempt to address the state’s transportation infrastructure needs and nearly $1 billion annual maintenance deficit. The original language of HB 1001 represents a rational, long-term and sustainable system for roads, highways and bridges and is the Chamber’s preferred approach at this time.

Any movement is positive movement at this point and there are many elements to like in Kenley’s amendment, but another task force or working group (or whatever you care to call it) is viewed as unnecessary given the amount of timely studies and commissions that have already looked at the state’s infrastructure needs in recent years. The Chamber will work with all interested parties to address the state’s needs in the most rational and comprehensive way possible.

Call to Action: Please urge your representative and senator to support a long-term fix for Indiana’s roads and highways; you can do so online. Fuel taxes have not been raised in more than a decade and no other short-term policies will address the state’s needs as well as a set of comprehensive policies in the original HB 1001 language. No other legislation even comes close, even though short-term funding is helpful.