Chamber Names Top 5 Successes from 2011 Session

Long overdue education reforms, vital tax reductions to stimulate economic growth and common sense prevailing on illegal immigration represent the biggest victories of the 2011 legislative session, says Indiana Chamber of Commerce President Kevin Brinegar.

"This was a very good year for pro-economy, pro-jobs bills that will positively impact households throughout the state. And the new education laws put the focus where it should be — on students and increasing their potential for academic achievement; these are the most significant enhancements to the state’s education system in more than 20 years," he explains.

The Indiana Chamber’s list of the five most important victories this session (in alphabetical order) with comments from Brinegar:

Corporate income tax rate reduction (HB 1004) — Decreases Indiana’s rate, one of the highest in the nation, from 8.5% to 6.5%; will be phased in over four years.

"This significantly strengthens Indiana’s already strong business tax climate. Indiana’s corporate income tax was exceedingly high; this reduction will make Indiana more competitive and bring its corporate rate in line with other states. Existing C corporations and their employees will realize the benefits through increased investments in jobs, equipment and company growth."

Illegal immigration policy that’s workable (SB 590) — Makes attempt to determine legal status of immigrants but does not aggressively overreach.

"This new law is much better than what was originally proposed. We can live with it. It’s a far cry from the discriminatory Arizona-style immigration law it started out as, which could have resulted in severe financial ramifications for the state’s economic development efforts. Thankfully, common sense prevailed.

"The ‘three strikes’ provision that could have led to a business losing its operating license and permits was removed, as were most of the law enforcement sections along with the ‘English-only’ requirements for public agencies." Continue reading

Ice Chills Big Day at Statehouse

What was shaping up to be a day of MAJOR committee hearings at the Statehouse on Wednesday fell victim to Mother Nature. Among the bills that were scheduled for debate — and we mean real debate:

  • A lengthy immigration battle was set for the Senate chambers; it has been moved to the afternoon of Feb. 9. Senator Mike Delph had promised a few weeks ago to pursue Arizona-type legislation, but word in recent days was that some of the more stringent provisions were being deleted. Either way, passions will be on display.
  • Assignment of benefits was scheduled to reappear in the House. This controversial health care billing procedure would potentially raise costs for employers and employees.
  • An education double-header was on tap. Teacher quality was to be the focus of the Senate Education and Career Development Committee in the afternoon, following the House Education panel tackling reform initiatives in an early gathering in the House chambers.

All these issues may end up on committee agendas next Wednesday, or some special meetings may be arranged.

Some legislators were scattering for home on Tuesday after General Assembly activity was cancelled. Ice in Central Indiana and massive snow in the north did not make for a good combination. We would expect activity to resume today but some legislators, particularly from the north, may not be able to return if indeed they vacated earlier in the week.

Tully: Trying to “Primary” Lugar Would be Ill-Advised

Indianapolis Star columnist Matthew Tully penned a column today contending that if a faction of the GOP was to push for a primary ousting of Sen. Richard Lugar in 2012, it would be an ill-fated and ill-advised decision. He writes:

However unrealistic it seems, it would be foolish to assume any long-term incumbent is untouchable, given the mood of the voting public of late. And most Republican insiders I’ve talked to expect Lugar to indeed face a challenge from a faction of the GOP that thinks he’s been in D.C. too long and worked with Democrats too often.

Still, there are reasons to believe Lugar will not suffer the same fate that has ended the political careers of some of his Senate colleagues. Here are five:

  1. Some social conservatives complain about Lugar, but he remains popular in the eyes of mainstream conservatives. Some ideologues portray Lugar as a liberal, a ridiculous suggestion for a guy who, according to The Washington Post, has voted with his party 84 percent of the time this year. That’s one percentage point less than the Senate GOP average. "There may be disagreements on certain policies," said Luke Messer, a former executive director of the Indiana Republican Party. "But he is deeply respected by Republicans.

  2. If Lugar does face a tough battle from the far right, many Democrats and independents likely would cross over to vote in the GOP primary in order to back him. "People on our side respect Dick Lugar," said former state Democratic Chairman Robin Winston.

  3. Gov. Mitch Daniels, who worked for Lugar for years, remains extremely popular. His support would help the senator. Additionally, the well-run political organizations of the two men have worked closely together and likely would continue to do so.

  4. Unlike some of his colleagues on the front end of the anti-incumbent wave, Lugar won’t be caught off guard. He has already made clear he is running again, a shrewd move that should keep any top-tier Republicans from entertaining the idea of a run.

  5. And here’s the final reason Lugar won’t lose in 2012: Hoosiers are smarter than that.

I’d like to "go rogue" here and offer my personal thoughts as a voter (which do not necessarily reflect the position of the Indiana Chamber): As someone who falls in the political center (a.k.a. abyss) of this conservative/liberal paradigm that’s been shoveled out in modern American politics, I find folks like Sen. Lugar to be rather refreshing in their willingness to think, compromise and generally try to make government actually work.

While it can be fun to draw ideological lines in the sand, get sanctimonious about protecting your team and toss around catchy barbs like "RINO," it’s far more productive to discuss ideas, consider the other side’s point of view and actually try to enact helpful legislation when the time warrants it. Personally, I’d argue Sen. Lugar has done that honorably for years.

Final Takeaways on New State Budget

Great, we have a state budget for the next two years, but what’s to make of it?

Foremost, the budget sticks to Gov. Daniels’ request to maintain a $1 billion surplus in the state’s reserve funds.   According to Indiana Chamber tax lobbyist Bill Waltz, this prudent amount is significant and important for the state to stay on track financially.

“With the revenue stream being so incredibly uncertain in the coming months and the federal stimulus dollars that are built into the two-year budget going away in 2012, it is critical that we not just cross our fingers and simply hope for the revenue stream to return.  Because if the economy fails to rebound or falters only slightly longer than the revenue projections, we will be in a hole at the end of the budget cycle.

“And then the only way to avoid a tax increase of some kind would be to utilize the surplus balance as that final bridge out of the troubled economy. In other words, it is at that time – not now or next year – that we (the state of Indiana) may want to use those funds,” he explains.

Waltz also believes the budget strikes a good balance between “spending desires and reasonable fiscal constraint on many issues (not just in the education area).”

A number of positive provisions that fell by the wayside via the regular session budget collapse had better fortune this time around.  Among them, the bulk of what was House Bill 1447, an all-inclusive piece of tax legislation, and a multi-million-dollar financial rescue for Indianapolis’ Capital Improvement Board (CIB).

The CIB situation simply had to be dealt with, Waltz says.

“Many from outside the Central Indiana area are reluctant to acknowledge the economic contribution that the CIB facilities (the convention center, Lucas Oil Stadium, Conseco Fieldhouse and Victory Field) make to the state’s economic vitality and coffers. Indiana, not Indianapolis, could not afford to see these operations and the tax revenue that their attractions bring be put in jeopardy,” he asserts.

Indiana Chamber education lobbyist Derek Redelman believes the budget bill also produced one of the best sets of education reform in the state’s history.

Heading that list of accomplishments is the new K-12 school funding formula that gives greater focus to students, rather than school districts, than any previous budget of the last couple decades. 

“The bill also included a scholarship tax credit that will generate private donations to help low- and moderate-income families to attend the schools of their choice – while also saving money for the state.  It also eliminated a longstanding statute that had prohibited schools from using the results of state tests to evaluate teachers,” Redelman notes.

“This budget avoided caps and other controls on charter schools, despite a session-long full-court press by Indianapolis Public Schools, House Democrats, teacher unions, school administrators and other charter school opponents.  Plus, it will allow virtual charter schools to finally get started, after a two-year moratorium created by the 2007 state budget.” 

Correction: The budget passed the Republican-controlled Senate 34-16.  A total of 30 of the 33 Republicans voted for the bill and were joined by four Democrats (Hume, Young, Arnold and Mrvan). Republican no votes were from Leising, Delph and Becker.