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.

Toll Road Tales: Good News for Taxpayers, Motorists

TReactions were varied recently when the company operating the Indiana Toll Road filed for bankruptcy. A researcher at the Harvard Kennedy School emphasizes the positive aspects of how that deal was structured and focuses on the continually evolving role of each party in such an agreement. Governing reports:

n 2005, two companies came together to form the Indiana Toll Road Concession Co. (ITRCC), which won the right to operate the toll road in exchange for a $3.8 billion up-front payment. The deal limited how much tolls could rise and included a trigger requiring the consortium to expand the roadway if certain congestion benchmarks were reached. The $3.8 billion threw off about $250 million that was used to fund other state transportation priorities.

Like so many other enterprises, ITRCC was done in by the Great Recession. Its financing structure called for large debt payments at the end of the first decade, which proved overwhelming in the face of revenues that didn’t meet projections when the downturn hit and traffic volume fell.

But what’s reassuring is that motorists will see no interruption in service or toll increases as a result of the bankruptcy. The roadway is still subject to the same performance metrics, and there will be no taxpayer bailout. State officials will first try to find a new operator to take on the remainder of the concession deal. If that doesn’t work out, the ITRCC will likely be recapitalized with an altered debt schedule.

In either case, customers will retain the benefits from the $458 million ITRCC has invested since 2006 in road, bridge and pavement improvements and a new electronic tolling system.

While it appears that the Indiana Toll Road deal has succeeded at protecting taxpayers and motorists, that doesn’t mean there aren’t lessons to be learned from the bankruptcy. To maintain a true public-private partnership, governments might want to avoid taking the entire concession payment up front.

Chicago completed a similar deal just before the Indiana Toll Road agreement and couldn’t resist the temptation to use the upfront windfall to plug other holes in the city budget instead of using interest from the concession payment to maintain transportation infrastructure. More recently, public-private partnerships for Virginia’s Pocahontas 895 parkway and Colorado’s Northwest Parkway featured smaller upfront payments but give taxpayers a cut of the ongoing toll revenue.

Linking Veterans With Jobs and More

sThe Indiana Department of Veterans Affairs will be visiting eight Hoosier communities over the next several weeks, holding Community Outreach events that will offer veterans, active duty members and their dependents opportunities to connect with services and prospective employers.

All events are free. Registration is requested for planning purposes. Each event will be held from 1:00-6:00 p.m. (local time) in the following communities:

  • October 27 – Valparaiso – Porter County Expo Center, 215 E. Division Road, Valparaiso. Register
  • October 28 – South Bend – Ivy Tech Community College, 220 Dean Johnson Blvd, South Bend. Register 
  • October 29 – Ft. Wayne – Ivy Tech Community College, Coliseum Campus, Room 1640, Fort Wayne. Register
  • November 6 – Terre Haute – Ivy Tech Community College Terre Haute Main Campus, The Community Room, 8000 South Education Drive, Terre Haute. Register
  • November 13 – Bloomington – Ivy Tech Community College, 200 Daniels Way, Hoosier Times Student Commons, Bloomington. Register
  • November 20 – Columbus – Ivy Tech Community College, 4475 Central Avenue, Columbus Learning Center, Columbus. Register
  • December 4 – Lafayette – Ivy Tech Community College, Grand Hallway, 3101 S. Creasy Lane, Lafayette. Register
  • December 9 – Kokomo – Indiana Wesleyan, Kokomo Education and Conference Center, 1916 East Markland Avenue, Kokomo. Register

Additional outreach events will be planned for Muncie, New Albany, Bedford and Jasper. Those interested in attending events in these communities can find more information here or call (800) 400-4520.

“Each event will provide information and assistance with VA benefits, claims processing, remission of fees and even what to do if someone wants to enroll or return to college,” said Deanna Pugh, Director of Veterans Employment and Education. “The Indiana State Police, Dish, NiSource, United States Postal Service, Kroger and Lowes will be among the companies and organizations looking to hire employees to work in these communities.

“We will also offer Dale Carnegie sessions to help veterans prepare for interviews. We’re very excited about connecting our resources to our veteran communities and helping link those who have served our country with the many services designed specifically to assist them.”

A new state law that took effect July, 1, 2014, allows for approximately 26,000 post-911 veterans to apply for assistance through the Military Family Relief Fund. This new law eliminates the three-year restriction on access to the fund, which provides grants that may be used for needs such as food, housing, utilities, medical services, transportation and other essential family expenses. The Military Family Relief Fund has a balance of more than $7 million and lifting the cap will ensure those funds are available to support Hoosier veterans and their families.

Since its establishment in 1945, the Indiana Department of Veterans Affairs (IDVA) has remained focused on aiding and assisting “Hoosier” veterans, and qualified family members or survivors, who are eligible for benefits or advantages provided by Indiana and the U.S. government.

Tour Events in Lafayette, Southern Indiana Connect Education with Industry

20140625_TF_Subaru_Legacy_Associates-8The Indiana Chamber recently co-sponsored two industry tours that brought educators and employers together to find ways to align efforts and better meet the needs of students.

The first event was in Lafayette at Subaru of Indiana Automotive. Educators, counselors and administrators listened to representatives from Caterpillar, Nanshan America, Kirby Risk, Duke Energy and Chrysler Group. Each employer seemed to be facing the same issue – a significant portion of their employees will soon be eligible for retirement and the current talent pool cannot replenish their workforce.

The group toured the Subaru plant, where they saw nearly every process for building a vehicle. Subaru, like many manufacturers, hires employees of almost all educational backgrounds, from high school diploma to master’s degree.

The next industry tour was in the southwest region at NSA Crane, a United States Navy installation. The base is the third largest naval installation in the world by geographic area and employs approximately 3,300 people.

Representatives from GKN Sinter Metals, TASUS Corporation, Cook Group and Jasper Engines all spoke about their workforces. Overwhelmingly, employer needs center on soft skills (communication, basic math and professionalism) and workforce readiness.

Matt Weinzapfel of Jasper Engines reported that 48% of their workforce hold an associate’s degree and/or technical certification and 36% hold no post-secondary degree, while only 16% hold bachelor’s degrees.

The group toured the Crane naval base and learned about jobs in electronic warfare, strategic missions and special missions. The base also offers internships within the various sectors.

“All of these jobs sitting open can be filled if we break down the knowledge barriers and reach students,” said Dan Peterson, vice president industry & government affairs, Cook Group.

The Indiana Youth Institute hosted the events, with the Center for Education and Career Innovation and the Center of Excellence in Leadership of Learning also co-sponsoring.

IFA, INDOT Address Transportation Committee About Toll Road, Future Plans

The Interim Committee on Roads and Transportation heard from both the Indiana Finance Authority (IFA) and the Indiana Department of Transportation (INDOT) on the Indiana Toll Road and current and future road infrastructure needs on Sept. 23. IFA Public Finance Director Kendra York and INDOT Commissioner Karl Browning testified.

York reviewed the status of several public-private partnership (P3) projects around the state, but most of the interest and questions concerned the pre-packaged Chapter 11 bankruptcy of the private operator of the Indiana Toll Road, ITR Concession Company, LLC (ITRCC) and its affiliates. ITRCC filed for bankruptcy on September 11.

York testified that the bankruptcy proceeding is expected to result in either the sale of all assets of ITRCC (including lease rights to the toll road) to a new entity or a restructuring of the existing debt. Under either scenario, the toll road will continue to be owned by the IFA on behalf of the state of Indiana. IFA will continue to have the rights it negotiated in the original lease agreement including the right to approve any new operator and that operator will be strictly held to the same operational standards set forth in the original lease agreement. There will be no change to the current toll rate structure under the lease agreement. Road operations will continue as usual during the bankruptcy process without impact to drivers, employees, vendors and the communities served by the road.

York said IFA will continue to monitor the bankruptcy and work with related parties to protect the public interest. In other words, any concerns about adverse effects of the bankruptcy proceeding on the toll road or the state of Indiana are misguided at best, misleading at worst.

Browning provided a broad overview of the state of Indiana’s roads and bridges during his testimony. When adjusted for inflation, INDOT is operating much more efficiently than in years past: Operating expenses in 2014 are approximately $74 million less than in 2005, but while INDOT is operating more efficiently, the state needs more revenues to address a growing need for maintenance of existing infrastructure, let alone expansion of the state’s highway network.

Within the next five years, all fuel excise tax revenues from the state’s highway fund will be required for maintenance of existing infrastructure; no funding will be available for expansion projects. Additionally, more than half of the state’s bridges are in the last 25 years of their useful life (50+ years or older) and will need significant reconstruction or remediation.

Both federal and state highway revenues are expected to remain flat or slightly decline due to a number of factors, including increased fuel efficiency standards and alternative-fuel vehicles. This will cause the state to have to look for creative ways to finance projects (such as P3s) or find new sources of revenue. INDOT is in the middle of a legislatively-mandated two-year study of needs and funding sources.

In short, while the state did well in the Major Moves era with strategic investments, it is facing increasing challenges to pay for future upgrades to its surface transportation network. New sources of revenue need to be found and the Indiana Chamber looks forward to the final analysis by INDOT in the two-year study.

Deja Vu for School Accountability

SIt’s only been a couple of years since the uproar over Indiana’s school accountability measures. To be sure, there were a lot of reasons for the pushback from educators and eventual legislation invalidating the current system. But one of the leading reasons was the decision to base “student growth” measures on comparisons of students to other students with similar starting points rather than measuring their progress toward the state’s academic standards.

But a year after legislative leaders, the Governor and the state superintendent convened a panel to construct a new accountability system, nothing has changed and the majority of the panel is set to recommend the same approach that is already in place – the same “growth” measure that has already been forbidden by the state Legislature.

How could this happen? Well, there are lots of factors.

Most importantly, the staff of the Department of Education and the Governor’s Center for Education and Career Innovation have simply worn out the panel. After 11 all-day meetings, committee members have been given none of the data that has been requested (and promised at the first meeting) to help develop alternatives; and the staffs have provided no outside experts other than people who developed Indiana’s current accountability model.

The staffs have also played games with terminology, suggesting most recently that they have accomplished the law’s focus on “criterion standards” because their peer-based growth measures create a new target performance level.

But the law doesn’t call for that. Rather, it is quite a bit simpler – as stated in the 2013 legislation:

“The new standards of assessing school performance: (1) must be based on a measurement of individual student academic performance and growth to proficiency; and (2) may not be based on a measurement of student performance or growth compared with peers.”

The final proposal must still be reviewed by the Legislature and approved by the State Board of Education. But if passed as currently drafted, it’s hard to imagine how a school that’s unhappy with its grade wouldn’t have solid standing for challenging it.

The state superintendent has been an outspoken opponent of school accountability, generally, and Indiana’s accountability system, specifically. But why the Governor’s staff would support this re-adoption of a failed and outlawed accountability system is baffling.

Numbers to Ponder

rThree totally unrelated, but intriguing, numbers courtesy of Governing magazine:

  • 33%: Americans with past-due debt that’s been turned over to a collection agency
  • 15%: Proportion of voting-age residents who cast ballots in the 25 states that held primaries in the first six months of this year. In 15 of those states, turnout was the lowest ever. (Indiana’s primary turnout was slightly below the 15% average)
  • 146: Number of U.S. counties that account for half of the country’s 316 million people. The rest of the population is distributed across the remaining 2,998 counties. Indiana’s largest and smallest counties, respectively, are Marion with 928,281 people (54th largest in the country) and Ohio with 5,994 people (ranked 2,758 nationally)

Time to Talk Area Code Changes

FIt must be a sign of advancing age that I fondly recall the days of three area codes that covered the state of Indiana. Today, that number is six with a seventh set to go into effect next month and public field hearings underway now on 317 area code relief.

Indiana had three telephone area codes (219 for the north, 317 for Central Indiana and 812 in the south) from the mid-1950s until the mid-1990s.

Today, the state has six area codes with a seventh to go into effect in October 2014.

Technology brought pagers, fax machines, wirelese phones and more. The Indiana Office of Utility Consumer Counselor says efforts to conserve existing number supplies and prolong the life spans of area codes have been successful, but the only way to provide new numbers in the long run has been to introduce new area codes.

The number of area codes throughout the United States, Canada and the Caribbean has more than doubled since 1995, with Indiana, 38 other states and eight of the 10 Canadian provinces adding new area codes.

The 317 area code was changed in 1996 with the addition of 765. Now, 317 is projected to run out of numbers in 2017. A hearing took place in Indianapolis last Friday. Four more are scheduled in Carmel (October 1), Franklin (October 14), Danville (October 29) and Greenfield (December 1).

An overlay method is being proposed. A similar procedure is being implemented in the current 812 area code with the new 930 coming into play yet this year.

Full details, including additional opportunities to submit comments.

Time for Work Share to Happen in Indiana

Work share is a positive option for both companies and their employees in times of economic need. It is a voluntary program that allows employers to maintain a skilled and stable workforce during temporary economic downturns.

Here’s an example of how it works. Instead of laying off 10 workers due to decreased demand, a company could keep the full workforce in place but reduce the hours of 40 workers by 25%. The impacted employees would receive three-quarters of their normal salary, as well as be eligible for partial unemployment insurance benefits to supplement their reduced paycheck.

Just like regular unemployment insurance, work sharing benefits would not fully cover lost income. They would, however, help mitigate the loss.

There is no negative impact on the state’s unemployment insurance fund.

Work share programs are in place in more than 25 states. They are intended as temporary solutions, usually lasting no more than six months. The biggest users are manufacturers, where work flow often varies based on current contracts.

Neighboring Michigan and Ohio passed legislation that authorized work share programs. Indiana failed to do so the last two years, despite support in both political parties. Let’s finally make it happen in 2015.

‘Indiana Competitiveness: What Works’ Event Set for Sept. 15 in Lafayette

Ivy Tech’s Lafayette campus will host Indiana Competitiveness: What Works on Monday, Sept. 15. The event, hosted by GE and Ivy Tech, will feature remarks from Rep. Todd Rokita and a keynote address from a senior leader at GE.

Additionally, there will be a panel discussion and networking opportunities for supply chain leaders and current and prospective suppliers. Speakers will discuss the state of manufacturing in Indiana and how it can be enhanced to compete in a global economy. Rep. Susan Brooks will also be in attendance and other members of Congress have been invited.

Details:
When: Monday, Sept. 15, 10 a.m. – 1 p.m.
Where: 3101 S. Creasy Lane in Lafayette
RSVP: If you plan to attend, RSVP to Sydney.Stone@ge.com by Sept. 12 with your name, title, organization and email address.