Behind Indiana’s Impressive CEO Ranking

Many of you likely saw the news yesterday about Indiana maintaining its No. 5 overall ranking – and tops in the Midwest – in Chief Executive magazine’s 13th annual Best & Worst States for Business survey. A few things that might have been missed:

  • As the name indicates, these rankings are based on CEO perceptions. It’s good for Indiana to be regarded so highly overall by the group making ultimate business decisions, but it also leads to few changes for most states
  • Texas was No. 1 for the 13th straight year and Florida No. 2 for the fifth year in a row. North Carolina (despite the turmoil over its since-repealed transgender bathroom issue) and South Carolina also topped Indiana
  • At the bottom, California was at No. 50 for the sixth year in a row. New York and Illinois were next in line
  • There has been some movement, however, in the middle. Ohio, now at No. 11, was No. 41 in 2011 and No. 22 just two years ago. On the other end of the spectrum, Louisiana was No. 7 in 2015 and No. 33 this time around
  • Indiana’s individual category rankings included: Workforce quality, No. 8 (although we know there is much work to do in this area); taxes and regulation, No. 14 (we would have expected to be a little higher there); and living environment, No. 16
  • Industry rankings were also part of the survey. Indiana was second in manufacturing and 10th in energy

Larry Gigerich, executive managing director of Fishers-based Ginovus and chair of the Indiana Chamber’s economic development committee, was quoted in the release of the rankings. He said simply, “The top-ranking states have continued to implement public policy supporting economic development to ensure that they remain as leaders.”

Complete rankings are available online.

Trial Lawyer Blames Tort Reform for Bankruptcy

We can’t make these things up. Shame on those lawmakers for protecting doctors from outrageous malpractice claims.

Thanks to our friends at the North Carolina chamber for alerting us to this story.

A former Democratic candidate for governor and state lawmaker has filed for bankruptcy protection. The Chapter 11 bankruptcy filing will allow Bill Faison, a personal injury attorney, to restructure debt related to his Durham law firm, Faison and Gillespie.

In an interview, Faison said he expects to pay his debts in full, which are listed at more than $7.1 million. The Jan. 3 filing lists his assets at $9.4 million, including his family farm, a lake house, other real estate holdings, six cars, two motorcycles and two boats. “I can get it all paid,” he said.

Faison represented Orange and Caswell counties in the state House for four terms before making a bid for the Democratic Party nomination for governor in 2012. He came in a distant third in the party primary. The majority of the loans came from banks to underwrite his law firm and he is the guarantor. He said the lines of credit “smoothed out the peaks and valleys of cash flow” to his law firm. But the current atmosphere is making it difficult for the firm to pay back the loan on time.

The firm is facing major setbacks, he said, related to the economic downturn and a Republican-led effort to put caps on medical malpractice claims in 2011. The new lawsuit limitations “hurt business a great deal,” he said.

 

Political Polls: This is Getting to be Ridiculous

Well this is just depressing: A third-party candidate for president was omitted from a presidential poll in North Carolina.

When I look at the two mainstream presidential candidates, I find that I have a hard time siding with either of them, so I am all for a third party coming in to shake up our political system and maybe work on behalf of the taxpayers instead of the political machine.

But that’s not the truly depressing part: Instead of asking a key voting state about all the candidates on the ballot (Libertarian candidate Gary Johnson is indeed on the ballot in North Carolina), the poll from Public Policy Polling took the space and time to ask the question: Do you have a favorable or unfavorable opinion of Honey Boo Boo?

Okay, for those of you who don’t have cable (that would be me), or don’t have time to tune into TLC (The Learning Channel, amusingly), Honey Boo Boo is apparently the nickname of a child pageant participant from Georgia (first seen on the channel’s "Toddlers & Tiaras" program), who has her very own show on TLC: "Here Comes Honey Boo Boo."

As I have never seen the show myself and don’t want you to have to search for it, here is what I can find on the Internet: “Star” of the show, Alana Thompson, is a seven-year-old beauty pageant contestant. Her mother regularly feeds her a mixture of Red Bull and Mountain Dew, fondly called “Go Go Juice” just before her pageants. And, even though the family resides in America, a good portion of the show is subtitled, due to the slang and thick accents of its cast.

So, let me break it down for you one more time. Instead of asking 1,084 potential North Carolina voters between October 12 and 14 about their opinion of the only third-party presidential candidate on the ballot, Public Policy Polling instead asked about their opinion of a seven-year-old reality television star from a different state.

WHAT?

I am not a political expert, so while I’m sure there is some over-arching reason for asking such a silly question, it just gives me even less heart about our political system. I’m flabbergasted that this is what it has come down to these days.

At least 50% of those responders were “not sure” (47% “unfavorable and 3% “favorable”). Oh, and the poll had Republican Mitt Romney with a small lead in the state over President Barack Obama, in case you cared.

Though, had the third party candidate been included, who knows what the results might have been?

Biggest UI Hole: It’s California By a Wide Margin

Indiana is unfortunately all too familiar with outstanding loans from the Federal Unemployment Account (that means borrowing money from the feds to provide unemployment benefits for state workers who have lost their jobs). At least Indiana’s balance of slightly over $2 billion owed pales to, guess who, California.

According to U.S. Department of Labor numbers at the end of February, California owed $10.2 billion of the $38.55 billion total that 28 states had borrowed from Uncle Sam. New York is second on the list with a $3.7 billion balance, followed by Pennsylvania, North Carolina, Illinois and Ohio.

California’s UI Trust Fund did not become insolvent until 2009, so the debt has been piling up quickly. Businesses suffer, however, as outstanding loan balances mean they lose credits and pay higher federal unemployment taxes until the situation is resolved.

Indiana Chamber efforts in 2011 helped move Hoosier businesses into a lower rate schedule to offset some of the increased federal payments. The move is expected to save employers a combined $2 billion through 2020.

Who else has outstanding federal balances? Florida, New Jersey and Wisconsin owe between $1 million and $2 million. Those with less than a $1 million balance (biggest balance first) are Kentucky, Nevada, South Carolina, Missouri, Georgia, Connecticut, Arizona, Colorado, Arkansas, Virginia, Rhode Island, Minnesota, Michigan, Kansas, Vermont, Alabama, Delaware and the Virgin Islands.

And the Top Manufacturing City is …

No matter the math, Indiana still generally ranks as the most manufacturing intensive state in the nation. That means we have more manufacturing jobs based on our population/workforce. Wisconsin and North Carolina are typically in the same neighborhood.

Manufacturers News Inc. changed the scope recently and put out a top 50 list of most manufacturing jobs by city. Certainly population is a bigger factor here, but there are still some interesting numbers.

The top 10 (list below), lost more than 95,000 jobs between August 2008 and the end of 2010. Big movers included Detroit (falling from 29th to 45th) and Seattle (moving up to 34th from 46th). Five from California (L.A., San Diego, San Jose, Irvine and Santa Clara) made the top 50.

Top 10 Manufacturing Cities

  1. Houston: 228,226
  2. New York: 139,127
  3. Chicago: 108,692
  4. Los Angeles: 83,719
  5. St. Louis: 83,123
  6. Dallas: 81,626
  7. Cincinnati: 81,364
  8. Indianapolis: 79,566
  9. Phoenix: 77,322
  10. San Diego: 70,709

Best Place to Work in … America

Our Best Places to Work in Indiana program has become incredibly popular through the years, and we’re honored so many companies apply and take part in the annual celebration and rankings announcement at the Indiana Roof Ballroom. But in case you’re wondering where the best place to work in America is located, Fortune magazine contends it resides in Cary, N.C.

The Great Place to Work Institute announced Thursday in Fortune magazine that a company known for its openness, SAS, is the No. 1 employer in the United States for the second year in a row.

“What we’ve learned is that, in the best companies—and we study them pretty extensively—their leaders are communicating directly, openly and honestly with their employees, particularly when they’re delivering tough messages,” said Great Place to Work Institute Vice President Erin Liberman Moran in an interview with Ragan Communications CEO Mark Ragan last October.

Karen Lee, senior manager of internal communications at SAS, says the No. 1 spot reaffirmed the role of communications in creating a stellar work environment:

"In an era of social media where communication is critical, transparency within internal communications at SAS reflects the trust our employees have in our leadership and in one another," says Lee, who was celebrating the selection with team members before dawn on Thursday.

SAS, a privately owned business analytics software firm based in Cary, N.C., has about 5,900 employees in the United States, 4,600 of whom work at the 550-acre corporate campus. In 2009, the company made $2.31 billion in revenue, according to the company’s website.

Among its many claims to fame, SAS boasts a 4 percent turnover rate; the industry average is around 22 percent.
 

Indiana’s Business Tax Climate: Not a Perfect One, But a Good 10

We’re No. 10! We’re No. 10! Not exactly the rallying cry one is used to hearing, but a refrain that deserves more plaudits than usual. Here’s why Indiana’s ranking in the Tax Foundation’s 2011 State Business Tax Climate Index is noteworthy:

  • It’s not easy to make substantial improvements in this area. Indiana has ranged between No.12 and No. 14 over the last five years
  • The top eight seemingly head the list by default as they do not impose one of the big three taxes (sales, income or corporate income). So, without too much of a stretch, you could say Indiana is second on the list
  • We’re far away from the bottom 10; in order from No. 50, that’s New York, California, New Jersey, Connecticut, Ohio, Iowa, Maryland, Minnesota, Rhode Island and North Carolina

The Indiana Chamber’s advocacy efforts certainly are contributing factors to the state ranking. Historic tax restructuring in 2002 (including elimination of the inventory and corporate gross receipts levies) is among the Decade of Policy Victories document reflecting major legislative accomplishments from 2000-2009. The Chamber has also achieved success in general property tax reductions and an expansion of a variety of tax credits (good for business, but not earning high marks in this report).

According to the Tax Foundation, the worst tax codes tend to have:

  • Complex, multi-rate corporate and individual income taxes with above-average tax rates
  • Above-average sales tax rates that don’t exempt business-to-business purchases
  • Complex, high-rate unemployment tax systems
  • High property tax collections as a percentage of personal income

Indiana’s rankings in the five categories are: corporate tax index, 21st; individual income tax index, 11th; sales tax index, 20th; unemployment insurance tax index, 12th; and property index, 4th.

Since this tax analysis game is not for the faint of heart, a little more from the Tax Foundation on how it all works.

The methodology of the State Business Tax Climate Index is centered on the idea of economic neutrality. If a state’s tax system maintains a “level playing field” for businesses, the index considers it neutral and ranks it highly. However, each state’s final score depends on a comparison with the other 49 states.

The overall index is composed of five specific indexes devoted to major features of a state’s tax system. Each of these five indexes is composed of several sub-indexes.

Each state’s laws and tax collections were assessed as of July 1, 2010, the first day of the 2011 fiscal year. Newer tax changes are the subject of commentary in an appendix but are not tallied in the scores and rankings.

The Tax Foundation has data charts, further analysis and a full 60-page report. By the way, you have to go west for most of the rest of the top 10 (in order): South Dakota, Alaska, Wyoming, Nevada, Florida, Montana, New Hampshire, Delaware and Utah.

And finally, going into a state budget year that will bring pressure to raise revenues, let’s all keep the vital importance of the tax climate in mind on business attraction and expansion decisions.

Looking for a Lottery Rebound

Personally, I have nothing against the lottery. In fact, I joined co-workers back in the 1990s in one of those infamous "everybody throw a few dollars in and we’ll all retire early when we hit it big" plans, only to never, ever get close in several years of playing. We really only earned enough once in a while to buy more tickets. But then I guess that’s why they call it a game of chance.

The number of lottery games have seemingly multiplied at a rapid pace since then. But with the Great Recession of the last few years, and certainly a few other factors, far fewer lottery players have been taking their chances.

According to the National Conference of State Legislatures, lottery revenues declined in 25 states in fiscal year 2009. In addition, they were flat in 10 states and increased in only seven. Indiana had the dubious distinction of the biggest drop, with revenues going down 18.1%. Puerto Rico, Oregon and Arizona were the only others with double digit drops.

North Carolina, with a relatively new lottery, saw revenues increase 17.4%. Others on the positive side of the ledger: North Dakota, Iowa, Ohio, Kentucky, Louisiana and Minnesota.

Finally, the seven states that have not authorized lotteries: Alabama, Alaska, Hawaii, Mississippi, Nevada, Utah and Wyoming.

At one point, many in Indiana questioned whether the lottery was a good idea. That was before horse racing, riverboats, racinos and the like. The tax dollars generated by the gaming industry have become an essential part of the state budget. That’s the safest bet one can make.

Pizza Madness: Another Valuable Social Media Lesson

I suppose the lesson you take from this incident depends upon your perspective. But one Charlotte restaurant is taking a great deal of heat from customers for… defending its customers? In these situations, there’s often an obvious right and an obvious wrong. This seems to be a little more of a gray area, however. The Huffington Post reports:

A North Carolina waitress is out of a job after griping on her Facebook page about the $5 tip she got from a couple who sat at their table for three hours. The waitress says the customers kept her at work an hour after she was supposed to clock out.

The Charlotte Observer reported Monday that 22-year-old Ashley Johnson felt slighted after waiting on the couple at Brixx Pizza.

So she blasted the couple on Facebook, calling them cheap and mentioning the restaurant by name.

Brixx officials told Johnson a couple of days later that she was being fired because she violated a company policy banning workers from speaking disparagingly about customers and casting the restaurant in a bad light on a social network.

Johnson says she has apologized to Brixx and is looking for a new job.

Obviously, there are many who believe Brixx was too harsh on its former employee, and are airing their discontent on its Facebook page. But Brixx fired back with a statement of their own, explaining their ongoing intent to respect their customers:

Brixx Wood Fired Pizza Brixx appreciates your feedback! Please know we value our employees very much, which is why we are one of the few small restaurant companies that offers benefits. Brixx also values our customers and has a policy against making negative remarks about them.

As an employer, it is necessary to enforce policies for the benefit of all our hardworking employees and valued customers. Our policies ensure Brixx is an enjoyable place to both work AND dine. We welcome your comments, but please keep it clean!

So, who’s right here?

Senate Races in Ohio, N.C. Too

Our attention is obviously focused on the Hoosier state, but voters also went to the polls in Ohio and North Carolina today. Each has a competitive Senate primary.

In Ohio, former Republican Rep. Rob Portman is his party’s choice for the seat held by retiring GOP Sen. George Voinovich.

Two state administration officials are battling it out on the Democrat side. Although polls show Lt. Gov. Lee Fisher comfortably ahead of Secretary of State Jennifer Brunner, Democratic activists are pushing Brunner’s candidacy. Low turnout could favor Brunner and make the race tighter than Fisher aides would like.

Incumbent House members from both parties are not expected to be seriously challenged in their primary races.

In North Carolina, Democratic strategists are nervous that former state Sen. Cal Cunningham, the party’s top recruit, will fall to Secretary of State Elaine Marshall. They view Cunningham as more likely to give Republican Sen. Richard Burr a serious challenge in November. Attorney Ken Lewis might provide a tough challenge for Burr.

Reps. Walter Jones and Howard Coble will face GOP primary challenges.