Taxes and Public Finance: A Very Early Look at What We Are Following

We have yet to see the complete list of bills that have been introduced, and no bills having primarily to do with tax have yet been heard in committee. But of those that are available for viewing and assigned to committee, quite a few are worthy of note. They may or may not ultimately get a hearing, so it cannot be said that they are moving. Nevertheless, these bills are ones to keep an eye on.

Two measures will undoubtedly move through to the end of session – albeit with the expected/unexpected twists and turns. House Bill 1001 on the budget currently contains the Holcomb administration’s spending proposals – that is until the Ways and Means Committee has its way with it. Accompanying it will be HB 1002, the measure for long-term transportation funding (see Mark Lawrance’s infrastructure story).

There are the usual sales tax exemption and sales tax holiday bills, which historically have not been favored by the budget makers: HB 1063, HB 1111 and SB 53. There are many dealing with property tax assessment and property tax appeals, which could get some attention: HB 1046, HB 1056, HB 1105, HB 1198, HB 1229, HB 1299, SB 292, SB 331, SB 350 and SB 415. Meanwhile, SB 449 addresses how personal property tax audits can be funded; SB 308 would take heavy equipment that is rented off the property tax rolls and puts an excise tax on the rentals; HB 1247 creates a minimum property tax fee; and SB 342 revisits tax increment financing.

On the local tax front, HB 1129 keeps up the ongoing work on local option income (LOIT) taxes while HB 1096 grants broad authority to locals to adopt food and beverage taxes.

Interestingly, and unnecessarily, HB 1160 seeks a further study of the Tax Court (on top of the review conducted by the Supreme Court just last year.) Tax attorneys will be interested in SB 440 as it gets into some procedural issues.

This is just a small sampling of what has been filed. Once bills involving tax matters begin to make their way through the committees, we will report on those that are of consequence to the business community.

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.

Around the Horn on Federal Legislative Issues

As part of the Indiana Chamber’s robust federal advocacy program, Caryl Auslander will be working with the Indiana delegation (both in Washington, D.C. and here in Indiana) throughout the year. Look for additional stories and coverage of our federal efforts on your behalf in these reports and through other communications.

Below are some of the top recent Indiana news items:

  • Congressman Trey Hollingsworth spoke on the House floor in support of the REINS Act during his first week on the job; the measure to curb unnecessary government regulation passed the House on Wednesday. Hollingsworth has also been placed on the House Financial Services Committee.
  • A Hoosier connection remains on the House Ways and Means Committee with Rep. Jackie Walorski (IN 2) receiving a nod; Sen. Todd Young was most recently on this important committee.
  • Chairman alert: Rep. Susan Brooks (IN 5) has officially taken the helm of the House Ethics Committee.
  • This week, freshman Rep. Jim Banks (IN 3) presided over the House floor debate of a statement of opposition to the recent U.N. Resolution on Israel; the measure passed the House easily.
  • Newly sworn-in Sen. Young was assigned to four important Senate committees: Foreign Relations; Health, Education, Labor and Pensions; Commerce, Science and Transportation; and Small Business and Entrepreneurship.
  • Retirement is on hold for former Sen. Dan Coats, who was announced as President-elect Donald Trump’s pick for Director of National Intelligence.
  • Indiana’s now senior Sen. Joe Donnelly was awarded the Department of Defense Medal for Distinguished Public Service; Donnelly is a member of the Senate Armed Services Committee.
  • Senators Donnelly and Young were successful in getting the Government Publishing Office to formally designate Indiana residents as “Hoosiers” (bye-bye “Indianans”) and celebrated with this video announcement.
  • South Bend Mayor Pete Buttigieg threw his hat into the ring for chairman of the Democratic National Committee.

Razor Sharp: Roanoke Barber Rex Ottinger Reflects on a Lifetime of Memories

Roanoke barber Rex Otttinger has seen it all – a steady stream of loyal customers, an unruly flood and leaner times during the long-hair trend of the 1970s.

And feel free to sleep in his chair, but interruptions like phones and TV are no-nos at this barber shop. In fact, Ottinger has never had a phone in the store – and never will.

Read about this Huntington County success story in the new BizVoice.

Hoosier Farm Families Earn Bicentennial Honor from State

It’s not every day someone presents a sheepskin deed signed by a past President of the United States. Linda (Saltzman) McCall sent this image to me of her family’s farm deed, signed by James Monroe. She said she’s pleasantly surprised by the shape it’s in considering it hung in the family’s home, enduring myriad temperature fluctuations through the years.

Saltzman and her family were one of four that received Hoosier Homestead Bicentennial Awards from the Indiana State Department of Agriculture last summer – an honor reserved for those whose families have had a farm in the state for at least 200 years.

Read the article about the honorees in the latest edition of BizVoice.

Indiana Chamber Comments on Governor-Elect Holcomb’s 2017 Legislative Agenda

Indiana Chamber executives comment on Gov.-elect Eric Holcomb’s legislative agenda announced today.

Mark Lawrance, Indiana Chamber vice president of engagement and innovation policy:

“His policy priorities match the most pressing needs for employers and residents. Whether that’s backing a long-term commitment to fund the state’s transportation infrastructure or taking steps to address our population’s drug crisis.

“We were pleased to hear that the Holcomb administration will continue the push to make the innovation sector a major part of the state’s identity. Investing in technology companies is so vital because these businesses complement our existing industry strengths in agriculture, logistics and manufacturing. In many ways, innovation has and is transforming those areas. There’s no doubt Indiana can become a highly recognized technology hub, and the state supporting the tech sector’s growth is key to making that a reality.”

Caryl Auslander, Indiana Chamber vice president of education and workforce development:

“His broad-based approach to education and workforce development is essential to ensuring students are on the right path from an early age, adults are able to find gainful employment and businesses can fill positions with local talent. We know financial considerations are always part of the equation, but the General Assembly needs to do all it can to fund many of these critical education initiatives. And that should start with an expansion of the pre-K program for disadvantaged youngsters.

“The Indiana Chamber has long supported making the superintendent of public instruction an appointed position (by the governor). The governor is viewed as the ultimate leader regarding the state’s education policy. In years past, leaders in both parties have agreed on this issue – but the timing wasn’t right politically. We hope it is now.”

Get Your Tickets Now for 2017 Legislative Dinner Featuring Ann Compton

Join top policymakers and business leaders from throughout the state at the premier legislative event of the year – our 2017 Legislative Dinner on March 14.

More than 500 of Indiana’s most influential business leaders, legislators and government officials will come together at the Legislative Dinner to discuss topics vital to Indiana businesses. Register today for the leading networking event of the 2017 Indiana General Assembly session!

Keynote Speaker
From her front seat at the White House for ABC News, Ann Compton covered seven presidents as well as innumerable life-changing and globe-altering events – from the end of the Cold War to the political dramas that made the daily headlines.

Compton will give a historical perspective of today’s global events while offering a look forward to the impact of current events and her first-hand knowledge of the people and issues that are shaping the future of this country.

Program Description
Lifeline Data Centers Reception: 6 – 7 p.m.
Dinner: 7-9 pm

Investment
Gold Table: $2,250
Standard Table: $1,500
Individual Ticket: $149

Buy your tickets online.

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.