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 North Carolina (despite the turmoil over its since-repealed transgender bathroom issue) and South Carolina also topped Indiana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.

A Welcome Move: State’s Telecom Agreement With Agile Networks Denied

The state’s controversial proposed lease of its cell phone towers, fiber and public rights of way to Ohio-based Agile Networks officially won’t happen.

Governor Eric Holcomb put an end to it in an announcement Thursday. The Indiana Chamber applauds his decision and had been advocating for such a resolution.

Funds from the proposed $50 million lease were earmarked for bicentennial construction projects, with the Agile agreement promoted as a way to bring greater connectivity to rural areas.

Beginning last September, after learning in more detail about the agreement, the Chamber voiced significant concerns and objections on behalf of the state’s telecommunications industry.

Chamber President and CEO Kevin Brinegar had numerous discussions with the Indiana Finance Authority and State Budget Committee members – the groups needing to approve the deal. The Chamber made a clear request that the agreement not proceed.

Therefore, we are very pleased that Gov. Eric Holcomb shared our belief that this deal was bad for Indiana.

In his statement, the Governor said: “I have asked the Office of Management and Budget to assess how best to move forward and to develop alternatives we might pursue. Enhancing broadband availability in rural parts of our state will be an important part of my consideration.”

The Chamber believes that’s the correct approach.

Our board-approved position supports free market competition in the delivery of advanced telecommunications services. Yet this deal went too far and essentially suppressed this important principle. Not to mention, good Hoosier companies inexplicably were not even given equal opportunity to bid for the project.

Additionally, all industry players and competing technologies should be on a level playing field. However, this proposed deal would have only served to pit the state against private providers.

Getting better broadband access to rural areas of the state should be a priority. That was unlikely to happen with the now-defunct deal, which would have done nothing to drive Agile Networks to serve our rural areas. The company’s publicized plans were to build in the state’s largest cities – Evansville, Fort Wayne and Indianapolis – where cable and broadband services and competitive choices already exist.

Looking ahead, the Chamber pledges to work with state government in any way it can to advance the effort to truly bring connectivity to rural parts of the state. These areas must be brought up to date technologically to help reverse their downward population and economic trends.

All About the Water

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The governors of the Great Lakes states recently approved a request by a Wisconsin city to draw water from Lake Michigan after its existing water supply dried up. But because the city isn’t in the watershed of the Great Lakes, the two Canadian provinces that share Great Lakes water rights say the request should be denied.

Waukesha, Wisconsin will be allowed to tap Lake Michigan for up to 8.2 million gallons per day once it completes a $207 million pipeline project that would draw in lake water and return fully-treated wastewater.

Delegates for the governors of Michigan, Minnesota, Wisconsin, Illinois, Indiana, Ohio, Pennsylvania and New York gave their unanimous consent to the first formal request to divert water outside the Great Lakes basin during a meeting of the compact council.

The 2008 compact prohibits water from being sent outside the basin watershed. Communities like Waukesha, located over the line but within a straddling county, can apply under a limited exception.

The eight governors approved the request over the objection of widespread opposition. Mayors, legislators, policy-makers and citizens around the Great Lakes have worried about the precedent Waukesha’s application represented.

Waukesha is under a court-ordered deadline to provide safe drinking water by mid-2018. The city draws most of its water from a deep aquifer that is contaminated with unsafe levels of radium, a naturally occurring carcinogen. The city has a population of about 70,000 people.

Kiplinger warns that more water conflicts will flare up, citing California, India, South Africa and the Middle East among the likely areas of dispute.

Health Care Just Keeps Getting Bigger

16446238A few health care economic facts to consider:

  • The United States spends more on health care than any other country – $3 trillion in 2014. That equals $9,523 per person or 17% of gross domestic product
  • In the six years after the recession, health care added 2.1 million jobs, more than the next three industries combined – leisure and hospitality, professional services and education
  • Employment in health care is projected to grow by 19% from 2014 to 2014, adding about 2.3 million new jobs
  • Nearly one in 11 overall jobs is in the health care field. In 2014, that was 12.2 million jobs
  • The top five states with highest percentage of jobs classified as health care jobs: West Virginia, 11.4%; Rhode Island, 11%; Maine, 10.8%; Ohio, 10.6%; and Massachusetts, 10.4%

Common Construction Wage Repeal Now in the Mix at the Statehouse

statehouse picIt was a welcome surprise last week when the Indiana Chamber learned that the Common Construction Wage Bill (HB 1019) was going to receive a committee hearing. The Chamber testified it was in strong favor of repealing the CCW statute, noting this has been the organization’s position for many decades.

The Chamber told the committee that CCW prevents open and fair bidding competition for public construction projects. It establishes a government-sanctioned advantage for one set of contractors and workers over all others. It requires taxpayers to pay significantly above market wages, and therefore excessive taxes, on public construction projects. And it requires the setting of a government-mandated price to be paid for construction labor that is excessive and completely unnecessary; we don’t set minimum prices to be paid on other forms of labor, construction materials or equipment.

At the core of the issue for the Chamber: CCW costs taxpayers hundreds of millions of dollars in excess and unnecessary tax burdens. Chamber members – over 80% of which are small businesses – and the rest of the business community pay over half of the excess taxes caused by CCW. The remainder is paid by farmers and residential property owners, including elderly homeowners on fixed incomes.

In testimony, Chamber President Kevin Brinegar relayed the unfortunate situation that occurred nearly a decade ago when three massive public construction projects were going on in Indianapolis at the same time: Lucas Oil Stadium, the new Indianapolis Airport and the expansion of the Indiana Convention Center.

The wage committees on those projects chose union scale. And they further chose union-only project labor agreements which effectively excluded the non-union contractors from participating. At the height of the construction of those projects, there was not enough union labor to work on all three simultaneously. And rather than go to skilled, trained Hoosiers who didn’t happen to hold a union card to fill those needs, they went to union halls in Ohio, Kentucky and Illinois. That meant literally thousands of out-of-state workers – approximately 4,000 – came to work on our projects funded by our tax dollars instead of using qualified Indiana workers. The wages paid to those individuals went back to Ohio, Illinois and Kentucky to be used in their economies, not in ours. The Chamber views this as unfair and inappropriate.

Brinegar also told the group he served on approximately 40 wage-setting committees during his 12 years on the Noblesville School Board. In a property tax-capped environment, cash-strapped local units of government, like schools, cannot afford to pay inflated costs for their construction projects.

The Chamber closed its argument by calling CCW an unnecessary and wasteful interference by government into the free enterprise system and a relic of the 1930s – a costly one that is far past time to be repealed.

Many others testified in favor of the repeal. The Anderson Economic Group said it had conducted a study in Illinois and Michigan on how much CCW added to overall costs. The Fort Wayne City Council president testified to the many projects that will be coming to Fort Wayne that could save millions of dollars if CCW is repealed. He further testified that the CCW committee process is predetermined. The former mayor of Terre Haute added that cities have been beaten up over the property tax caps; repeal of CCW would alleviate some of that problem. The Associated Builders and Contractors stated that government should not be in the business of mandating wages.

House Bill 1019 is expected to receive a final floor debate on Monday. Organized labor is mounting stiff opposition to the measure in an effort, much like in the fight over right-to-work, to protect a special, government-created privilege at the expense of taxpayers and the free market. The Chamber will be diligently working with like-minded organizations to secure passage of HB 1019.

Call to Action: Please send a brief message to your state representative in support of HB 1019 and repealing the common construction wage law. It’s quick and easy via our grassroots program!

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.

On the Right Jobs Track

Indiana’s employment picture has brightened considerably in recent months. Some numbers behind the numbers, according to the Department of Workforce Development:

  • There are over 30,000 more Hoosiers in the labor force than in March of 2000, the employment peak in the state
  • Indiana’s labor force has grown at six times the national rate over the past year
  • The number of unemployed Hoosiers (196,272) is less than 200,000 for the first since August 2008
  • Since July 2009, the low point in recent employment numbers, Indiana has added 214,600 private sector jobs (10th in the nation) at a rate of 9.2% (seventh in the nation)
  • In the manufacturing world, the state ranks third in jobs added over the past year (behind Michigan and Ohio), second (behind Michigan) in jobs added since July 2009 and ninth in growth rate over the past year

Kroger: An Indiana Staple

Kroger's web site outlines the history of the supermarket chain, describing how Barney Kroger invested his life savings of $372 to open a grocery store in downtown Cincinnati in 1883. The son of a merchant, he ran his business with a simple motto: “Be particular. Never sell anything you would not want yourself.”

Step forward to now, and if you live in Indiana, there's a likely chance you know someone employed by a Kroger store. Here are some numbers and reasons why this supermarket is a pillar in the state's grocery economy:

  • 18,128 – Kroger associates employed in Indiana
  • $13.3 million – in food, cash, foundation grants and sales-based fundraising was distributed in 2012 from Kroger's Central Division
  • 1,940 – jobs in Indiana created over the last seven years
  • 1,630 – contractors employed statewide
  • 146 – food stores with a variety of options
  • 105 – pharmacies
  • 79 – fuel centers
  • 4 – distribution centers (Bluffton, Shelbyville, Seymour and Indianapolis)
  • 4 – manufacturing plants
  • 2 – division headquarters (Seymour and Indianapolis)

Ad War Winner is TV Stations in Key States

Combined television advertising spending in the presidential race is on pace to top $1 billion by Election Day. And while you might think you’re seeing more than a few attacks and the occasional "I have an idea" spot here in Hoosierland, we’re actually barely a blip on the radar screen.

Residents in the battleground states are being bombarded. Just last week, the tally came to an estimated $14.3 million in Florida, $13.9 million in Ohio and $9.3 million in Virginia. Colorado and Iowa have also been part of the mix since the summer.

In fact, before the campaign was even in full swing, here were the 10 media markets as defined by most gross rating points (an advertising measure that, in simplied terms, means  reach times frequency) for just July and August.

  1. Colorado Springs
  2. Roanoke-Lynchburg
  3. Richmond-Petersburg
  4. Denver
  5. Des Moines
  6. Columbus
  7. Cincinnati
  8. Cleveland
  9. Tampa-St. Pete
  10. Cedar Rapids

I guess one can always switch the channel, but there’s no guarantee you won’t be "attacked" there as well. Good luck and remember there are only two more weeks to go.

Parties Fight for U.S. Senate Majority

Republicans are vying hard to capture 51 seats in the U.S. Senate. Likely holding onto their House majority, a Senate victory would prove incredibly useful for them — even moreso if Mitt Romney were to win the Presidency, in what remains a very tight contest. Indiana is now a focal point as Richard Mourdock and Joe Donnelly are also in a remarkably close race. Brandon J. Gaylord of the Daily Caller opines on the chances of both parties:

Until “legitimate rape” became part of the political lexicon, the Republican path to a Senate majority was straightforward. Take the four Democratic seats in Nebraska, North Dakota, Missouri, and Montana, while accepting a loss in Maine, for a net of +3 Senate seats. This would create an even 50/50 split in the Senate. From that baseline the GOP would have needed to hold Scott Brown’s seat and win just one of the toss-ups in Wisconsin or Virginia. Other, less favorable options were open in Florida and Ohio.

In the past month, much has changed on the Senate landscape, but I’m still projecting the GOP will pick up three seats this November. Missouri is no longer a GOP lock. In fact, it barely qualifies as a toss-up. However, Republicans have expanded the map to compensate for the loss of one of their most favorable pick-up opportunities. In Wisconsin, Tommy Thompson survived his primary and is a consistent favorite over the Democrat, Tammy Baldwin. Josh Mandel in Ohio and Linda McMahon in Connecticut have drawn even with their Democratic opponents in recent polling. The races in Virginia and Massachusetts have hardly budged and remain true toss-ups.

Democrats have also received encouraging news. Besides a much better chance to keep Missouri, Bob Nelson is maintaining his lead in Florida, although his numbers are still very shaky for an incumbent. Democrats are also hopeful that a new round of polling will validate favorable surveys taken over the summer in Indiana and North Dakota. Despite Republicans being expected to win in North Dakota and Nebraska, Democrats believe they have superior candidates and fundraising. In Nevada, Shelley Berkley’s ethics problems have not yet hurt her campaign. She consistently trails her Republican opponent, incumbent Dean Heller, by less than five points.