Purdue’s Income Share Agreement Program Takes On Philanthropic Component

We covered Purdue’s new income share agreement program, a measure to help students lessen the debt they incur, in BizVoice last year.

Purdue recently announced its “Back a Boiler” program has added a philanthropic aspect by allowing donors to contribute as well. A release from the school has more:

Beginning this fall, Purdue students who apply to take part in Back a Boiler – designed to offer students and their families an alternative financing option – may also apply for available funding support from the new Pave the Way program.

Addressing Purdue alumni and friends at a dinner in Naples, Florida, President Mitch Daniels recognized the support of Bob and Patti Truitt, Purdue alumni who approached the university about expanding Back a Boiler so that donors could participate, in addition to investors.

“Our hope is that we can not only help students finance their education, but also help teach the importance of charitable giving, including the joy and importance of giving back to Purdue,” said Bob Truitt, a 1962 graduate of Purdue’s School of Aeronautics and Astronautics. “Patti and I are honored to make the initial commitment to Pave the Way.”

Back a Boiler participants receive education funding in exchange for an agreed-upon percentage of their post-graduation income over a set number of months. In addition to signing a Back a Boiler contract, Pave the Way participants are asked to make a voluntary pledge. After graduation, students fulfill their Back a Boiler commitment and are encouraged to donate to Purdue through charitable giving, creating an evergreen Pave the Way fund to benefit future students.

“It’s what we like to call a virtuous cycle,” said Amy Noah, vice president for development, Purdue Research Foundation. “We’re grateful to Bob and Patti for establishing an ongoing legacy of philanthropy, and we’re hopeful that our generous alumni and friends will be interested in supporting future generations of Boilermakers through this new way of giving to Purdue.”

To learn more, visit purdue.edu/evertrue/pavetheway.

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!

Senate Needs to Hear from You on Top Issue

36601064Highways and bridges are easily taken for granted. They only come to mind for most of us when something goes wrong: A car hits a large pothole or there is an inconvenient road closure. But if you look around, the inevitable aging of our infrastructure system is happening.

There are three legislative proposals to address a $1 billion a year maintenance shortfall in funding for roads and bridges. Only one, HB 1001, helps meet long-term needs.

Yes, it will cost the average driver $25 more a year in gasoline taxes. But we are all spending much more than that (an average of $366 per year) on automobile repairs due to poor quality roads.

Senators are reluctant to increase taxes in an election year. Employers and voters, however, want a long-term solution. It’s too important to our economy and the time to act is NOW.

Please email your state senator urging passage of HB 1001 and long-term road funding.

Learn more: Read the write-up on the HB 1001 committee hearing and this one-pager which outlines additional infrastructure facts.

Paving the Way for Good Roads

PollQuestion

We’ve got a new poll question (top right) asking about a strategy to pay for long-term infrastructure funding. The current House Republican plan calls for a modest gasoline tax increase and higher cigarette taxes (that would go toward Medicaid spending, with sales tax funds currently used in that area shifting to transportation).

More details on the legislation: HB 1001

The most recent poll asked for your top legislative priority. Civil rights expansion (36%) topped the list, followed by increased transportation funding (28%) and education testing reform (16%).

Lawmakers Hear from INDOT on Road Funding; Gov. Makes $1 Billion No-Tax Proposal

30449450Two key events in recent weeks on the transportation front in Indiana: A long-awaited Indiana Department of Transportation (INDOT) study on long-term funding options for Indiana’s roads, highways and bridges was presented on Oct. 15 to the Interim Study Committee on Roads and Transportation; and just a few days before, on Oct. 13, Gov. Pence proposed a $1 billion, four-year plan for short-term transportation needs whose most prominent feature was no tax increases. INDOT Commissioner Brandye Hendrickson appeared with the governor at his announcement and testified before the interim study committee.

Hendrickson provided a broad overview of the state of Indiana’s roads and bridges during her testimony and INDOT’s study vendor, Cambridge Systematics, testified at length on the options available to the state to address long-term transportation funding, concluding that policymakers need to “decide what Indiana should invest in and how best to pay for it.” Both federal and state highway revenues are expected to decline in future years due to a number of factors, including increased fuel efficiency standards and more alternative-fuel vehicles hitting the roads.

All fuel excise tax revenues from the state’s highway fund are required for maintenance of existing infrastructure; no funding is available for expansion projects such as completion of I-69, adding lanes to I-65 or I-70, or new bridges across the Ohio River. Additionally, more than half of the state’s bridges are in the last 25 years of their useful life (50-plus years or older) and will need significant reconstruction or remediation in coming years.

Bottom line: The state needs more revenues to address a growing need for maintenance of existing infrastructure – let alone expansion of the state’s highway network.

Pence proposes a mix of bonding (debt), general fund appropriations and use of the state’s reserves in his “21st Century Crossroads” plan. His proposal would seek $450 million over three years to be appropriated by the General Assembly from the state’s general fund, $250 million to be used from the state’s reserve funds, $50 million from the state’s Next Generation Trust Fund (established by Major Moves monies) and roughly $240 million in new bond financing as existing debt gets retired or refinanced. The plan is short term in nature and, while tapping appropriate sources, needs the consent of the Legislature (where several Statehouse voices expressed reservations about the bonding aspect of the plan).

The Indiana Chamber would like to see a mix of increased fuel excise taxes, indexation, tolling, fees on alternative fuel vehicles and other tools based upon a “user fee” model discussed in the 2016 legislative session, along with the use of existing tax authority by cities, towns and counties to address the needs of local streets and county roads. Policymakers must make some hard choices with the support of the state’s business community to address the scale and scope of the challenge.

In short, the era of strategic investments fueled by the Major Moves program is over. The prevailing (default) practice of making stop-gap appropriations from the state’s general fund is not a reliable or strategic means to pay for future maintenance and upgrades to Indiana’s surface transportation network. Currently, we risk wasting strategic investments already made, and our roads and highways will deteriorate along with our reputation as “The Crossroads of America.”

Charter Schools Being Shortchanged in Federal Poverty Aid

19293579Despite no change in student population, many charter schools across the state are experiencing a sharp decline of federal Title 1 funding, with little to no explanation from the DOE. Title I funding assists poverty-stricken students meet educational goals.

For example, Christel House Academy experienced a 20% drop in funding this year, to the tune of $121,743. Meanwhile, IPS (which has experienced student numbers going down) received an 8% increase, close to a $1.5 million bump. Similarly, Indianapolis Metropolitan High School, a charter school where 94% of students are eligible for free or reduced-price lunch, took a budget hit of $36,000 this year.

Federal rules state that schools cannot have more than a 15% drop in Title 1 funding in any one year. However, all of the schools that received more than a 15% decrease were charter schools.

The DOE response was that the charter schools must have made a mistake, but it is still gathering information. The federal government has since stepped in and is requiring DOE to provide information on calculations of Title 1 funding for the past few years. This story is far from over.

There was a significant decrease in Title 1 funding across the board in Indiana, but it is extremely important that this reduction is allocated equitably among the schools. These charter schools are public schools and provide education and resources to students of poverty means across Indiana. It is extremely important that this issue be resolved accurately and swiftly to provide Hoosier students with the education they deserve.

The Indiana School Matters blog also took a further look at why Title 1 funds were cut for our charter schools.

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.”

Highway Trust Fund Has Some Potholes

36601064The Congressional Budget Office asserts the national Highway Trust Fund would need $3 billion in ADDITIONAL revenue to keep funding transportation projects through the end of September. And it would need $8 billion if Congress chose to extend funding authority until the end of 2015. Read more via The Hill.

Obviously, there are serious challenges facing America’s road infrastructure.

Cam Carter, the Indiana Chamber’s vice president of economic development and federal relations, outlines the main problem.

“Congress needs to get its act together and summon the political will to fashion a long-term solution to the insolvency of the highway trust fund,” he asserts. “We’ve had our fill of short-term patches. Some will say that the highway fund is insolvent because today’s vehicles are more fuel efficient and that is depressing revenues going into the fund – and there is some truth to this. But, the greater truth is that Congress hasn’t raised fuel taxes to keep up with inflation since 1993 and that, more than anything, is the root of the problem.”

Governor Passes on Preschool Opportunity

GPreschool education has become a top priority for the Indiana Chamber and for countless members throughout the state. The prospects for making significant improvements to our state’s educational levels will remain challenging as long as large numbers of children are entering kindergarten unprepared for school. Moreover, those challenges are compounded and are impacting all Indiana students as schools are forced to deal with wide gaps in achievement levels.

Those are just two of the reasons for the preschool emphasis. It is critically important that Indiana join the vast majority of other states in providing funding that will help low-income parents to access their choice of preschool programs that are educationally based and accountable for outcomes.

During the 2014 legislative session, Indiana took a small step in addressing this challenge by approving a $10 million pilot program in five Indiana counties. To be certain, it was a good step forward – driven in large part by the leadership of Gov. Pence and House Republicans. But it fell far short of Indiana’s needs.

Fortunately, an opportunity arose shortly after the session to greatly expand those funds through a federal grant program that would provide $20 million per year for four years. Indeed, Indiana was identified as one of just two states that would receive “priority status” in the grant. Accordingly, staff from the governor’s office, the Department of Education and other preschool advocates began working on the application, which was due for completion this month.

Gov. Pence, however, announced last minute – just as the proposal was being completed and readied for submission – that Indiana would not apply for the funds. He cited concerns about federal intrusion and the desire to implement a program that is best for Hoosiers. But to the frustration of advocates and commentators across the state, he has not yet offered specifics on those concerns.

To be certain, this is a politically charged issue. Even the pilot program would not have happened if the Governor had not ignored pleas to the contrary and appeared, in person, to advocate for the program in the Senate. What ultimately did pass was the result of hard negotiating by the Governor and House Republicans with the Senate.

Yet, it remains disappointing that Gov. Pence chose to take a pass on this new opportunity. If Senate leaders were concerned about funding – as seemed clear in the legislative debates – then this was a unique opportunity to expand Indiana’s program with outside funds. If federal strings were a genuine problem (not just the prospect of a problem), then the specifics of that challenge were not made apparent.

Meanwhile, Indiana is proceeding with its pilot program. The Indiana Chamber is hopeful that the “pilot” aspect of the program will focus strictly on administration matters and not be used by opponents to revisit, yet again, whether preschool is needed and effective. Those questions have been answered. Preschool is a key strategy in the Chamber-led Indiana Vision 2025 plan to help achieve the goal of eliminating achievement gaps. The state must  move farther and do it faster to accomplish the goals and the vision to make Indiana a “global leader in innovation and economic opportunity where enterprises and citizens prosper.”

Preschool thus again becomes a priority issue in the upcoming legislative session. It’s disappointing that Indiana’s foray into this important issue will not be bolstered by the outside financial support that was made available – and that any additional investment will fall fully on Indiana taxpayers.