Compton Shines at 2017 Legislative Dinner

Ann Compton, a 40-year veteran of ABC News and the White House press corps, relayed her experiences and thoughts on President Trump and the media at the 2017 Indiana Chamber Legislative Dinner last night at the Indiana Roof Ballroom in Indianapolis.

In addition to her many amusing anecdotes about past presidents and thoughts on President Trump, she also relived the tragic day of September 11, 2001. She was traveling with President George W. Bush on Air Force One as all involved struggled to grasp the magnitude of what had happened.

We were also grateful to be joined by Gov. Eric Holcomb, who offered thoughtful and humorous remarks following his first few months on the job. See photos of the evening below:

WOTUS Executive Order Highlights Recent Federal Activity

  • On February 28, the White House announced that President Trump signed an executive order directing the administrator of the Environmental Protection Agency and the assistant secretary of the Army for Civil Works (Corps of Engineers) to review the Waters of the United States (WOTUS) Rule and restore the rule of law. Congressman Jim Banks (IN-03) praised this action that would ensure the rule promotes economic growth and minimizes regulatory uncertainty: “I hear repeatedly from my constituents that the main thing holding back small business owners and farmers is over regulation. The WOTUS rule is an example of Washington overreach that is affecting businesses, utilities, manufacturers, farmers and land owners across northeast Indiana. I’m pleased to see President Trump make the review and revision of this rule a priority.” As a reminder, the Indiana Chamber mentioned WOTUS as a burdensome regulation in its list of regulations we sought repeal of in a letter to Vice President Mike Pence and sent to the delegation.
  • The White House sent its initial budget guidance to federal agencies this week, outlining a $54 billion increase in defense spending and corresponding reductions to most non-security agencies. An Office of Management and Budget official told reporters that the Trump administration will propose a 10% increase in defense spending and funding bumps for national security-related efforts. But that will mean cuts to domestic programs as well as foreign aid.
  • Former Indiana Sen. Dan Coats – President Trump’s nominee for director of national intelligence – faced questions from the Senate Intelligence Committee as phase one of his confirmation process.
  • Hoosier Seema Verma moved another step forward in her confirmation as the next administrator for the Centers for Medicare & Medicaid Services. On Thursday, the Senate Finance Committee voted 13-12 in support of her nomination, which now goes before the full Senate.
  • Senator Todd Young recently introduced the Investing in Student Success Act of 2017 as an out-of-the-box method of financing higher education. According to the Washington Examiner, “…the funding would not come from the federal government, but private companies who sign ‘income-sharing agreements’ with students. As the name implies, the investor finances the student’s tuition, in exchange for a percentage of the individual’s income for a set number of years after graduation.” According to Sen. Young, “Big picture here: There’s currently $1.2 trillion in outstanding student loan debt held by the federal government, and 43% of the roughly 22 million Americans with loans weren’t making payments as of Jan. 1. There’s certainly a need for some sort of way to finance your college education that does not place the risk on taxpayers.”
  • Congresswoman Susan Brooks (IN-05) invited former Indiana Chamber board member and current Indiana Economic Development Corporation President Elaine Bedel to be her guest at President Trump’s speech this week to the joint session of Congress.
  • I recently visited D.C. and met with the offices of congressional representatives Banks, Brooks, Bucshon, Hollingsworth and Messer. We discussed repeal and replacement of the Affordable Care Act, regulatory reform and our D.C. Fly-in event in September. Look for more in-depth information on my visits in next week’s report.

Hobart High School, St. Mary Medical Center Earn School Counseling-Business Partnership of Year Honors

Janice Ryba, CEO of St. Mary Medical Center in Hobart; Tamika Catchings, former WNBA all-star and luncheon keynote speaker; Rachael Gayton, Hobart High School senior and scholarship recipient; Dr. Peggy Buffington, Hobart School Superintendent; Shelley Huffman, director of college and career readiness, Indiana Chamber of Commerce; and Christy Huston, executive director of the Indiana Chamber of Commerce Foundation.

The inaugural School Counseling-Business Partnership of the Year award was presented to Hobart High School and St. Mary Medical Center in Hobart at a luncheon ceremony yesterday in downtown Indianapolis. The recognition, developed by the Indiana Chamber of Commerce Foundation to highlight innovative approaches to college and career readiness, comes during National School Counseling Week.

Many factors led to the Hobart-St. Mary alliance being selected. Among them: the hospital’s sponsorship of Hobart’s Promise Indiana 529 college savings program; the establishment of a health care clinic in the schools to meet the needs of both students and their families, plus St. Mary’s providing a wide range of work-based learning experiences and credential opportunities for high school students.

Indiana Chamber Foundation Executive Director Christy Huston pinpoints specific instances. “The medical center provides over 50 students each year with the screening tests required to take part in the Emergency Medical Services program. It also hosts approximately 30 students a year in a variety of internship and other learning opportunities.

“We also found that through the dedication and leadership of CEO Janice Ryba they go the extra mile. To accommodate one student’s interest in health care administration, a St. Mary’s Medical Center team member changed his hours of work to ensure that student was able to participate in meetings and experiences.”

Additionally, the award provides a $1,000 scholarship to a Hobart senior. Rachael Gayton, who will be attending Ball State University in the fall of 2017, was selected by the school to receive the scholarship. Gayton is in her fourth year of the school’s biomedical sciences program and interning at St. Mary’s in the pediatric unit. She says that her interaction with nurses and their willingness to share their experiences have solidified her plans to become a nurse practitioner.

“This alliance is a shining example of a career mentorship program. We congratulate St. Mary’s, Hobart and Rachel for their excellent work,” Huston states.

Nominations from throughout Indiana were submitted for the award. Danielle Adams, Hobart High School director of guidance, nominated the winning partnership.

The Indiana Chamber Foundation has conducted extensive research into effective school counseling practices, and has been designated by Lilly Endowment as one of the technical assistance providers to all eligible Indiana schools. Currently, the Indiana Chamber Foundation is a resource for 15 districts (78 schools) that all received planning grants as part of an up to $30 million Lilly Endowment Comprehensive School Counseling initiative.

The School Counseling-Business Partnership of the Year honor was presented at the Indiana INTERNnet’s IMPACT Awards luncheon, which celebrates excellence in internships. Appropriately supporting the luncheon’s theme of “Shooting for Success,” former Indiana Fever WNBA All-Star and four-time Olympic gold medalist Tamika Catchings delivered the keynote address, “Scoring Big with Your Career.” Catchings is also the founder of the Catch the Stars Foundation, which assists Indianapolis youth with goal-setting to promote fitness, literacy and youth development.

A Step Closer to Sales Tax Collection for Online Purchases

The Indiana Chamber supports SB 545 (Sales Tax Collection by Remote Sellers).

This bill takes an important step toward the Legislature requiring online retailers who have no physical presence in Indiana to collect Indiana sales tax from their Indiana customers when they make online purchases. Ultimately, one of two things must happen for the requirement to go into full effect. Either the U.S. Supreme Court has to determine that states are allowed to impose this requirement based on their economic activity in the state (and the nominal burden associated with it), or Congress must pass legislation to authorize states to require the online sellers to collect a state’s sales tax.

The issue is pending before both bodies and several states are passing legislation to put pressure on one of the two entities to act and resolve the issue. Senate Bill 545 is modeled after a South Dakota law that is under review by the high court. It is designed to put Indiana in the position of making the requirement effective as soon as an Indiana court declares the collection valid under federal law. So this remains legally complicated, but SB 545 is a thoughtful and sound approach.

Senator Luke Kenley has pursued this issue diligently for many years – doing everything possible to address the problem of the sales and use tax on these transactions going uncollected. He is to be commended for his pursuit in the past and for formulating this legislation. In-state brick and mortar retailers are put in an unfair position when their online competitors are not required to collect and remit Indiana’s sales tax (as they are), effectively giving the “remote sellers” a 7% price advantage. Additionally, Indiana’s sales tax base is diminished each year as the online sales market continues to grow at rapid rates. What’s more, this is not a new tax since purchasers are already legally obligated to report their online purchases and pay the “use” tax when they file their income tax returns. But the reality is very few people comply with this law.

The Chamber supported the bill in committee this week and, in fact, has been working along with Sen. Kenley for years to achieve, by some means, state authorization for collecting these unpaid taxes. The objective is set forth in our Indiana Vision 2025 economic plan and we just might, after years of complications, be getting closer to obtaining this goal.

Concerns Over Education Matters Bill

The Indiana Chamber opposes, in part, SB 108, which eliminates the requirement that the Department of Education must publish a model compensation plan. It also:

  • Eliminates a requirement that each school corporation shall submit its local compensation plan to the department
  • Eliminates a requirement that the department must publish the local compensation plans on the department’s web site
  • Removes requirements that the: (1) department shall report any noncompliance of a school that fails to submit its compensation plan; and (2) State Board of Education shall take appropriate action to ensure compliance
  • Makes changes to the time frame, from four to six years, in which the State Board may take over a failing school
  • Provides that a principal or superintendent, or the principal’s or superintendent’s designee, may recommend an individual to participate in the Indiana high school equivalency diploma program

The Indiana Chamber testified against the provision concerning failing school interventions. We feel strongly that the trigger threshold of State Board of Education intervention should be kept at the current rate of four years instead of the drafted language of six years. It is important to keep our schools strong and accountable for our students, and six years is simply waiting too long to act regarding an underperforming school; our students deserve better.

The bill was heard in the Senate Education Committee last Wednesday and held until this week for amendment and vote.

Smaller State Revenue Collections Continue: How Will It Impact 2017 Legislative Session?

Each December the state budget makers receive a revenue forecast prepared by group of very knowledgeable and conscientious fiscal analysts, economists and academics. The group considers economic predictions, uses elaborate models and applies involved equations to generate what has proven to be remarkably accurate predictions of how much the state will collect in taxes over the next two years. Every other year, including this year, their numbers serve as the basis for building the state’s biennium budget. While lawmakers will debate how the projected revenues should be spent, Indiana is fortunate that lawmakers accept the consensus of these experts and do not debate how much money there is to spend – as is the case in many other states.

Forecasters project that Indiana will take in $31.5 billion in FY2018 and FY2019. This is around a billion dollars more than what was projected for the last biennium. However, as good as the predictions have been historically, FY2017 estimates turned out to be off the mark by $378 million. Low gas prices were a major contributor to the inaccuracy. Unexpectedly cheap gas meant less sales tax on those less expensive fill-ups.

When coupled with generally weaker sales tax collections, the FY2017 (ending in July) collections are now expected to be about 2.5% less than earlier projections. That money will have to be made up in the first year of the biennium, from the projected 2.9% year-over-year (FY2018 over FY2017) growth. Fortunately, the forecasters see a little better growth, 3.9%, in the second year of the biennium (FY2019). The bottom line is that the money available to cover growing expenses and new funding desires will be very modest, somewhere around $1 billion – that’s only about 3% more money for the entire two-year period. And essentially it all comes in the second year, so look for budget makers in the 2017 legislative session to be very frugal in FY2018 and then build in some increases in FY2019.

Economic uncertainty, sluggish sales tax collections, further diminishing gaming revenues and other factors will all put additional pressure on the budget process. As these things play out, the forecasters could shift their numbers a little more before they update their two-year projections in mid-April, just a couple of weeks before the budget has to be passed by the General Assembly.

Chamber Comments on Recommendations from Transportation Funding Task Force

Indiana Chamber of Commerce President and CEO Kevin Brinegar comments on the release of recommendations from the FIRSST (Funding Indiana’s Roads for a Stronger Safer Tomorrow) task force:

“The task force has provided additional emphasis on three key priorities: today’s revenue sources are not adequate; long-term funding is required to meet both current maintenance and future new construction needs; and new funding should be based on a user-fee approach.

“We support the work of the task force and are prepared to assist legislators and the Holcomb administration in passing data-driven legislation that will help drive Indiana’s economic future. Reliable transportation infrastructure is critical for companies and the jobs they provide across the state.”

Experience Eli Lilly’s Humble Beginnings at Indiana Historical Society

If you haven’t been to an Indiana Historical Society “You Are There” exhibit, you need to rethink some things. They are always artfully done and make for an incredibly engaging way to learn history.

The new “Eli Lilly at the Beginning” experience is no different. I visited the facility in November for a “Getting to Know” feature in BizVoice (stay tuned for the January/February 2017 edition). Actor Mark McNees was quite knowledgeable, both in and out of character as Col. Lilly, and helped me see Lilly in a way I hadn’t before. Like many central Indiana natives, I’ve always heard about the company and its impact on the pharmaceutical industry — and its dedication to philanthropy — but I was admittedly ignorant about its founder and his humble beginnings. This experience allows visitors to interact with not only Lilly, but his first employees (he only had three) and his son, J.K.

He developed his lab in 1876 in what is the heart of today’s downtown Indianapolis. But the industry climate was quite treacherous.

“In the papers, they called Indiana the dumping ground for bad pharmaceuticals,” McNees explained. “So they were what we call patent medicines – not patents like Lilly would have today – patents were like snake oils. So anybody could say ‘I came up with this hair elixir’ and all you needed to advertise in the paper was a testimonial.

“A lot of times they would go to a family member, who’d say, ‘I tried Uncle Joe’s hair tonic and I grew hair,’” he adds. “So they would sell it through wagons or stores. There was zero regulation at the time. Also, people were making medicines incorrectly and often killing people. We dealt with things like belladonna (deadly night shade), opium, strychnine, things like that.”

McNees relayed that Lilly grew his business largely because of his reputation for quality and consistency.

For more on the experience, which is scheduled to run until January 2018, visit the IHS web site.