Sen. Donnelly’s Visit Highlights an Active Month for Our Congressional Affairs Committee

donnellyWhile the presidential election may be the talk of D.C. and the media, this is also a busy time of the year for federal policy conversations for the Indiana Chamber.

In mid-August alone, Sen. Joe Donnelly, Senate candidate Evan Bayh and state Sen. Jim Banks, the Republican candidate for congressional District 3, met with our congressional affairs committee members to discuss issues important to Indiana. And Congresswoman Susan Brooks (District 5) was the keynote speaker for our Indiana Conference on Energy Management, advocating for the need for both sustainable and affordable energy.

While we may never agree on all matters with our congressional members, their overall willingness to engage, listen and act – by and large – in the best interest of the Hoosier business community and residents is a longstanding hallmark of Indiana’s delegation. And we are very appreciative for that.

Donnelly, who is not up for re-election, shared his thoughts on a variety of issues during his nearly hour-long visit. For one, he contends the gridlock in Congress is overblown: “What you see on TV bears no reflection to what is reality.” He stressed that 80% of the time the group works together, but the 20% – which often features high profile issues – is what drives the media reports. And “time after time, the Indiana delegation works together.”

Whether that’s Brooks with Donnelly on the law to combat opioid abuse, signed by the President last month, or Indiana’s senior senator, Dan Coats, and Donnelly – joined by District 9 Congressman and Senate candidate Todd Young – leading the charge to suspend the medical device tax for two years. And these are just two of the many examples.

Incidentally, these are among the efforts that led to Donnelly being presented with the U.S. Chamber’s “Spirit of Enterprise” award at our office last week; the honor is for his continued commitment to job creation and economic growth.

2016 Primary Illustrates Rapidly Changing State, National Political Landscape

60498552To describe the 2016 primary elections in Indiana as anything less than dramatic and jarring seems an understatement. Two years ago, record low turnout tipped the balance to ideological sub-groups of motivated voters. This year, unprecedented turnout in both parties was the environment.

In the same election where Hoosier voters overwhelmingly chose “anti-establishment” leaders in Donald Trump (R) and Bernie Sanders (D) in their respective party primaries for president, Hoosier Republicans preferred by a 2-1 margin Todd Young over the conservative, Freedom Caucus poster-boy Marlin Stutzman. This seeming contradiction carried down into state legislative races.

A large majority of Hoosiers detest the federal government, distrust both political parties, and want someone or something to lash out at. With Republicans in charge of both houses of the General Assembly by strong quorum-proof majorities, if you’re looking for some political payback in Indiana, the Republicans are the ones calling the shots.

In the 2016 primary elections, only one Democrat incumbent legislator faced a primary election challenger. However, 14 Republican legislators faced primary election challengers. The 2016 primary elections – just like in 2014 – were about the Republicans.

Two years ago, candidates at the primary election faced a likewise frustrated and ideologically-driven electorate feeding tough challenges from the right. In 2014, the very low turnout election resulted in highly-energized subgroups of voters – those angry and motivated to vote against someone – to turnout to vote. This year, huge volumes of new GOP primary voters, motivated by the presidential race and “anti-establishment” anger, washed over races like tsunamis of discontent.

In state legislative races, incumbents and new candidates alike who distinguished themselves in both aggressive personal contact with voters, organized and efficient campaign operations and who positioned themselves solidly to the right or left with their party’s bases were generally successful. There were exceptions, but this continues to be the formula to win in primary elections.

A fundamental, foundational shift appears to be underway in the Hoosier electorate. This is not unique to Indiana, but the state does appear to continue to be on the cutting-edge of political conflict and change. A relatively “conservative” state in terms of culture and political attitudes, Indiana has not been a sleeper state in terms of policy and political conflict.

Back-to-back legislative battles over highly-charged social issues of abortion, LGBT civil rights protections, RFRA, and gay marriage aren’t the only policy battlegrounds. Infrastructure, tax cuts, education reforms, right to work, and more have been a focus.

There hasn’t been much “sleepy Indiana” to be found in policy debates or political activities in the state for some time. The ingredients of conflict in this political soup are a product of significant and often rapid changes in our culture, society, economy and workplaces. Our political system is where these competing priorities and often difficult personal and societal transformations are debated and competed over at the ballot box.

Indiana Business for Responsive Government (IBRG), the non-partisan political action program of the Indiana Chamber of Commerce, was heavily engaged in the primary election cycle to help elect pro-jobs, pro-free enterprise candidates to the Indiana General Assembly. Unlike most other PAC programs, IBRG is not in the business of “picking the winners,” but being there to defend incumbents with strong voting records and to challenge those who do not.

IBRG continued its record of election successes with 18 of 22 endorsed primary election candidates winning.

Indiana Chamber Endorses Rep. Todd Young for U.S. Senate

young pic camera (2)The Indiana Chamber is endorsing Congressman Todd Young (R-IN, 9th District) in his candidacy for the U.S. Senate. The announcement was made today at a press conference at Indiana Chamber headquarters in downtown Indianapolis.

“We believe Todd Young is the most qualified and most economic-minded individual running for the Senate seat,” said Indiana Chamber President and CEO Kevin Brinegar. “He has repeatedly demonstrated sound fiscal policy and prudent decision-making on issues that are vital to jobs and economic growth.”

Brinegar further emphasized Young’s engagement with the business community and his focus on economic, fiscal and regulatory issues.

“After he was appointed to the Ways and Means Committee, the congressman sought substantial feedback on potential federal tax reforms and what would have the most impact on Hoosier companies and their employees. He listened to our members – through personal conversations and a survey – using their insights to help form his pro-economy agenda.”

The Indiana Chamber’s nonpartisan congressional action committee, comprised of volunteer business leaders from around the state, determined Young’s endorsement.

At both the state and federal levels, Indiana Chamber endorsements are driven by vote scores on pro-jobs, pro-economy issues. For state endorsements, the Indiana Chamber relies on its Legislative Vote Analysis report. Congressional endorsements are based on a combination of the U.S. Chamber’s own vote scores and an analysis of votes on Indiana Chamber federal policy positions.

Representatives of the U.S. Chamber, which also is supporting Young’s campaign, joined the Indiana Chamber for the press event.

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%).

Cook: Politics Full of Surprises, but Obama Win Remains Most Shocking

Cook_CharlieCharlie Cook is editor and publisher of the Cook Political Report and a political analyst for National Journal magazine. Cook is considered one of the nation’s leading authorities on American politics, and The New York Times has called him “one of the best political handicappers in the nation.”

Cook will be the keynote speaker at the Indiana Chamber’s 2016 Legislative Dinner on February 9. (Get your tickets now!) I recently spoke with Cook for an evaluation of this very turbulent time in American politics. Here is an excerpt from the conversation.

In 2014, the GOP had a major shake-up when Eric Cantor, a member of leadership, was unseated in the primary. In Indiana, we had a similar shock in 2012 when Richard Lugar was ousted. What are some ongoing lessons for long-standing legislators to take from that? Is that mostly a GOP predicament due to its Tea Party elements, or are do you see any Democrats potentially dealing with primary turbulence in the near future?

Cook: Washington and Congress have never been beloved, and alienation is increasing. But it shows you have to be back in your state and your district, and really keep a tight feel on the pulse back home because it can get out from under you. Cantor was a bright, effective member, but he went on the national stage and became a major force in the national Republican Party. But to do that meant not going home and keeping fences mended as well as he should have.

Sen. Lugar had become this enormously respected figure in terms of international politics and the world scene, and a real statesman. But that came at a cost. And not having a home back in the state became symbolic of something.

So yes, there’s a “Tea Party versus The Establishment” dynamic in the Republican Party, but there’s an older dynamic of “going national” and maybe not tending to things back home quite as attentively as you have to in an era when people are so suspicious of politicians. But there’s certainly more volatility and anger within the GOP right now than there is in the Democratic Party. Although Sanders and the Occupy Wall Street movement shows it does exist in the Democratic Party, it’s more profound in the GOP. We’re not seeing Democratic incumbents knocked off in the primaries at the regularity we see in the GOP.

What shocked you as far as the most surprising election result you’ve seen in the past 20 years?

Cook: I think Obama beating Clinton. There were signs early on that he had a unique appeal with younger voters … but to have someone who had just barely been a member Congress upset one of the biggest names in the Democratic Party, it was one of the biggest shocks I’d ever seen.

In some ways, freshman senators Marco Rubio and Ted Cruz – although philosophically they’re very different from where Obama was – (remind me of that) but the idea of a first-term senator doing that well was unprecedented. It showed you that a lot of the old rules may not be applying.

Cook: America’s Political Infatuation Better than Indifference

Cook_CharlieCharlie Cook is editor and publisher of the Cook Political Report and a political analyst for National Journal magazine. Cook is considered one of the nation’s leading authorities on American politics, and The New York Times has called him “one of the best political handicappers in the nation.”

Cook will be the keynote speaker at the Indiana Chamber’s 2016 Legislative Dinner on February 9. (Get your tickets now!) I recently spoke with him for an evaluation of this very turbulent time in American politics.

Below is one of the questions (and stay tuned for more soon):

Perhaps I’m asking the wrong person, but do you think people pay too much attention to politics (compared to policy or other global affairs)? It seems like the presidential primary and election is such a long process in the U.S. – especially compared to Canada – and is always highly covered. Are we at risk of political fatigue in some way?

Cook: This is such an unusual election. Our campaigns are always long, and they’re getting longer. But that’s the nature of our elections. It’s not like a parliamentary system where the prime minister calls an election and five or six weeks later there is an election.

But it’s a combination of two things: 1. It is important who’s President of the United States. Whoever it is, whether we like them or not, we have to live with them for four to eight years; 2. It’s almost like a sporting event with people handicapping it the way they’d talk about a Colts game. I think it’s perfectly healthy. I’d rather people have a curiosity about it for a long time than they think it doesn’t matter. In that sense, some of the fascination with Donald Trump is healthy in that it’s channeling anger and alienation into the process, rather than people just throwing up their hands and giving up.

Now, I don’t think Trump will be the Republican nominee, and if I’m right, the question is: What will happen to those Trump voters who are alienated and angry? In the absence of Trump, will they withdraw from the process? That’s an important question.

RFRA 2.0 and Road Funding

statehouse picElection year dynamics, conservative Republican super majorities and the non-budget nature of the “short” session create the context for all issues facing the Indiana General Assembly in 2016. In economic development, the only issues to see much traction are adding LGBT civil rights protections to the Indiana Code and a short-term fix for the state’s roads and highways with an emphasis on local funding. Other issues will arise, but are unlikely to gain much attention.

Last spring’s rancorous debate over the Religious Freedom Restoration Act (RFRA) damaged Indiana’s brand in the international marketplace for jobs and investment. It led to an economic boycott of Indiana, a viral trashing of our state’s reputation in the international media and a black eye for our state’s political leadership. Moreover, the enduring stigma attached to Indiana as a discriminatory and unwelcoming place, especially among a Millenial generation that represents our future workforce, endangers our prosperity. That is why the Indiana Chamber has made adding protections for the LGBT community in state law a priority for the upcoming session.

New legislation will start in the Senate, where Sen. Travis Holdman (R-Markle) has drafted a bill that attempts to strike a balance between the religious and LGBT communities. The bill, as it stands, will probably not make either of those constituencies happy. The synopsis prohibits discrimination based on sexual orientation or gender identity while also providing protection for religious liberty and conscience. Additionally, it also preempts local civil rights ordinances that conflict with the state civil rights law. Look for an interesting debate as the session progresses.

In the area of transportation infrastructure, the General Assembly likely will take only baby steps to address an acknowledged nearly $1 billion annual funding gap between current revenues and maintenance needs. Legislative leadership seems content to wait until 2017 before pursuing any significant changes to the way Indiana funds its roads, bridges and highways. Nevertheless, armed with the results of a major road funding study by the Indiana Department of Transportation (INDOT) presented over the summer, all legislators will be able to evaluate proposed solutions in 2016 – it is just unlikely that they will move on them, especially any tax or fee increases. (The INDOT study examined existing fuel excise taxes, their future revenue potential and alternative funding mechanisms and revenue streams, such as vehicle miles traveled [VMT] or tolling.)

The legislation to watch is HB 1001, which will contain a number of reforms and potential funding mechanisms based upon the initial data from the INDOT study. The Indiana Chamber collaborated with key legislators in crafting HB 1001, which can be likened to a block of stone delivered to a sculptor’s studio: It will be an array of many options that will be chipped away at during the legislative session, hopefully into something recognizable (and helpful) in the end.

The condition of our infrastructure has already become highly politicized with partisan accusations and dueling proposals from Gov. Pence, House Democrats and the Republican majority caucuses, but nevertheless we expect several issues to be examined in sobering detail: gasoline and diesel fuel excise tax increases; fees for electric or alternative-fuel vehicles; repurposing the 7% sales tax on gasoline for the state’s highway fund; and a discussion of indexing fuel taxes for inflation, among other proposals.

Given the controversial nature of these topics and a near allergic reaction by politicians to tax increases in an election year, we anticipate it will be a very contentious and interesting session.

Colorado Court Decision May Impact Indiana’s ‘Lawsuit Lending’ Battle

10044552As the 2016 legislative session nears, an interesting development occurred in Colorado over an issue that the Indiana Chamber has been working on for the last several years. This week, the Colorado Supreme Court determined that the practice of litigation finance, or more commonly referred to as “lawsuit lending”, was determined to be a loan and subject to Colorado’s Uniform Consumer Credit Code (UCCC).

Lawsuit lending is the practice of advancing money to a plaintiff/someone involved in an accident in anticipation of winning a lawsuit in court. If the plaintiff is awarded a settlement, the advance must be repaid at considerably high interest rates. If the plaintiff loses the suit, there is no obligation to repay the loan.

Proponents of the industry have claimed that the advance is not a loan because there is no recourse if the suit is lost. Opponents (including the Indiana Chamber) believe that this process interjects a third party into the civil justice system and prolongs the settlement process.

The Colorado Supreme Court’s decision puts lower interest rate limits on the advance of these loans. Two companies doing business in Colorado stopped operating in 2010 after the state office that regulates Colorado’s UCCC determined that the state law applies to their businesses. After the two companies filed suit to overturn the regulatory opinion, the state attorney general’s office countersued. The companies were accused of unlicensed lending and charging “exorbitant” interest rates to plaintiffs.

In conclusion, the Colorado Supreme Court wrote: “We hold that litigation finance companies that agree to advance money to tort plaintiffs in exchange for future litigation proceeds are making ‘loans’ subject to Colorado’s UCCC even if the plaintiffs do not have an obligation to repay any deficiency if the litigation proceeds are ultimately less than the amount due. These transactions create a debt or an obligation to repay that grows with the passage of time. We agree with the court of appeals that these transactions are ‘loans’
under the code…”

Attempts to regulate the practice have been unsuccessful in Indiana. Hoosier proponents of the practice have indicated that subjecting finance companies to the UCCC in Indiana or subjecting them to an interest rate of less than 45% will put them out of business, so there has not been language that could bring about a compromise. The Indiana House of Representatives has passed a bill for several years that the Chamber has supported. However, the Senate has sided with the lenders and stifled the Chamber’s attempts to forward our position.

Still, the Colorado Supreme Court decision might be a game-changer in Indiana. It would not be surprising to see legislation introduced that will mirror what happened in Colorado. Last session, a similar measure was inserted as an amendment into a bill that came over from the House. The language was removed on the Senate floor before a vote was taken. Legislation this session that would be tied to Indiana’s UCCC should be assigned to the House Financial Institutions Committee, where it will find support.

Likewise, any bill tied to the UCCC should be sent to the Senate Insurance and Financial Institutions, chaired by Sen. Travis Holdman (R-Markle), where it would most likely find support. However, the issue historically has not been tied to the UCCC and has been assigned to the Civil Law Committee, where Sen. Joe Zakas (R-Granger) is chair. Senator Zakas has not been supportive of the Chamber’s lawsuit lending position.

The Chamber anticipates further debate on this issue as the new legislative session unfolds.

State Superintendent Needs to be Appointed, On Same Page with Governor

It’s about good public policy. It’s about what’s best for students and teachers.

For nearly 30 years, the Indiana Chamber of Commerce has supported having the state superintendent of public instruction be an appointed position. We did this when Republicans and Democrats controlled the governor’s office. And we have been far from alone.

In years past, the state Democratic and Republican parties have included it in their platforms. And in 2004, both Gov. Joe Kernan and challenger Mitch Daniels had it among their campaign proposals.

It may be surprising to some, but the Indiana State Teachers Association used to support having an appointed superintendent. However, the group changed its tune once its 2012 endorsed candidate, Glenda Ritz, was elected.

The Indiana Chamber has remained consistent with its position and believes politics should be put aside.

Having an appointed superintendent came oh so close to happening in the late 1980s during Gov. Robert Orr’s administration – passing the House and falling only one vote short in the Senate. Since then it’s mainly been a parade of governors and superintendents not on the same page on major education policy (regardless of which party held either office). That situation doesn’t serve the state, students, parents or teachers well.

Our governor campaigns on education issues and sets an education agenda. In order to be held accountable for that, he needs to be able to appoint the superintendent of his choosing. That way, we can be assured there is alignment with respect to education policy. Hoosiers can then hold the governor truly responsible for education and factor that into his performance assessment come election time.

Appointing a superintendent also means the person chosen comes from a broader pool of qualified candidates. And the selection should then be based on the person’s education and leadership merits, not political backing.

Many have known for a long time that the current system isn’t conducive to getting things done. That’s only been exacerbated the last two years with the divergent philosophical opinions of Gov. Mike Pence and Superintendent Glenda Ritz. Too often this has resulted in the State Board of Education at a crossroads, if not a standstill. That’s entirely unacceptable.

What’s more, the superintendent, as head of the state Department of Education, should be treated like every other agency leader. We don’t elect the superintendent of the Indiana State Police, commissioner of the Department of Revenue and so forth. All of those officials are appointed at the discretion of the governor. The Department of Education should be the same.

Indiana is already behind the times – and more than 35 other states – in acknowledging that an appointed superintendent serves citizens best. Our preference would be that realization happen sooner rather than later. We recognize the political sensitivities and pressures currently in play – though we don’t agree with bowing to them – and want to see serious discussion and action taken on the issue this legislative session.