Chesterton Tribune                                                                                   Adv.

Ugly choices ahead for Indiana lawmakers

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By PAULENE POPARAD

A small, red box was on the wall where a Power Point presentation showing an Indiana landmark was being projected Friday.

“It’s ironic the fire alarm is sitting just about on top of the Capitol building,” observed Vince Griffin, Indiana Chamber of Commerce vice-president.

Griffin and others told local business owners, bankers, elected officials, Realtors, accountants, attorneys, educators and consultants the upcoming Jan. 5 long session of the Indiana General Assembly will be faced with some ugly choices.

“Whatever they do, it will not be pretty,” said Bill Waltz, state C of C vice-president for Taxation and Public Finance.

The non-partisan Fiscal Policy Institute estimates a shortfall between Indiana revenue and expenditures ranging from $700 million to $1.3 billion. “It’s not good,” said Waltz. “The picture is bad but bad is a relative term and compared to other states like Illinois and California, we're not really as bad.”

The General Assembly's main task is passing a budget and redistricting. With 19 new members in the state House and five in the Senate, that's 24 wild cards thrown in this session's legislative deck.

Waltz said it will be tough for the Assembly to raise taxes. With 80 percent of the state budget tied to education spending and Medicaid, there's not much room left to maneuver.

When it comes to K-12 education, the chamber anticipates Gov. Mitch Daniels will be especially engaged. Waltz said legislators almost have to get to education to deal with the deficit.

The state chamber supports restricting items for teacher collective bargaining strictly to those involving compensation; enacting merit or performance-based teacher pay structure; allowing students in failing schools to attend other public or private schools; and expanding entities that can authorize charter schools.

When it comes to taxation the chamber opposes any new or increased business tax yet supports both exempting taxation of machinery and equipment, and making improvements to tax administration procedures.

Waltz doesn't perceive an appetite for legislators to tinker with property taxes but they'll be on the hunt for new revenue they can pretend isn't a tax increase. As far as privatizing the Hoosier Lottery, Waltz said that has gotten less attractive and not likely to come up.

Economic development will have an emphasis on capital and job creation, it was predicted. The 88 year-old state chamber supports authorizing blanket public-private partnerships statewide for transportation /infrastructure projects to increase private-sector investment, and adopting a right-to-work statute.

Waltz said companies simply remove Indiana from consideration because it doesn't have such a law. State Rep. Ed Soliday, R-District 4, said, “If you want to start a labor war, it's the people in this room that will pay for it.”

Waltz said the business personal property tax is another black mark on the state.

Matt Reardon, an economic development advisor with consultant SEH, said the onerous tax puts the burden on local government to drive economic development. Waltz said finding a way to allow local entities to exempt the tax may be plausible under certain circumstances.

Don Babcock, economic development director of NIPSCO, said the utility does offer abatement for qualifying facilities and electric customers to help stimulate growth.

The Indiana chamber supports meaningful government reform with a strong focus on townships; Waltz said some recommendations to consolidate/reform Hoosier government found in the Kernan-Shepard report will be revisited this session.

When asked if consolidating libraries likely will be proposed again --- a prospect opposed by Westchester Public Library here --- Waltz said that option may or may not be put forward.

Soliday said the mood could be to give County Councils more legislative power, and to better define the appropriate roles of councils and the County Commissioners.

Griffin is chamber vice-president for Energy and Environmental Policy. He said a huge hole to fill is an outstanding loan balance of $1.8 billion Indiana owes the federal government after the state's Unemployment Trust Fund ran out of money in November, 2008. Changes approved in 2009 include a higher employer tax rate taking effect in 2011.

When it comes to labor relations, the chamber supports an overhaul of the state's unemployment insurance system to reduce fraud and to bring revenue and benefits in line with each other.

Griffin said anticipate a number of bills on immigration. The chamber opposes any immigration policy that attempts to take away an employer's right to do business. The chamber supports a total ban on smoking in the workplace but opposes any health-care mandates or assignment of benefits.

Griffin said by 2014 Indiana will have to implement new federal health-care regulations at a cost of nearly $4 billion over 10 years --- money Indiana doesn't have. A related concern is expected to be the availability of primary-care physicians.

It was noted by speakers that increasing the cost of doing business for employers only will hurt their employees and customers.

 

 

Posted 11/22/2010

 

 

 

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