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Business groups say legislative session among best

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Pro-business groups are celebrating the end of a legislative session that some dubbed one of the most favorable on record.

Among their biggest victories: a reduction in corporate income taxes, an overhaul of the state’s unemployment insurance system and the weakening of an immigration bill that initially resembled a controversial Arizona law.

Sweeping—but controversial—education reform also resounded as a win for business interests. They see moves such as paying teachers based on performance and providing vouchers for low-income students to attend private schools as ways to provide better options and strengthen the state’s work force pipeline.

“There are always some additional things you would like for them to accomplish, but overwhelmingly, this was a very positive session,” said Indiana Chamber of Commerce President Kevin Brinegar. “It ranks right up there with 2002,” when the state did a major tax restructuring.
 
A couple of measures will begin to affect businesses’ pocketbooks in the next couple of years. Starting in 2012, the state will start to phase in a four-year decrease in the corporate income-tax rate from 8.5 percent to 6.5 percent. Business lobbyists say that will make the state more competitive for attracting jobs and will put companies in a better position to grow.

“It will bring a boost to small-business owners who are struggling in this economy,” said Barbara Quandt, director of the Indiana chapter of the National Federation of Independent Business. “The vast majority of new jobs are created by small businesses. Anything we can do as we emerge from this significant recession will translate into more Hoosier jobs.”

A restructuring of the state’s unemployment insurance system also will reduce the amount businesses have to pay in state taxes to reload the indebted fund from which payments are made. This year, the changes would lower an increase in premiums businesses statewide must pay from $866 million to $723 million.

At the same time, it will trim worker benefits 25 percent.

But that bill wasn’t a total business victory. In addition to the state taxes, Indiana businesses also must repay the federal government principal and interest for $2 billion borrowed to cover unemployment insurance payments.

During the last two weeks of the session, the state chamber had pushed for a bill that would allow the state to issue a bond to repay the federal government and secure lower interest rates. That legislation—which Brinegar estimates would have saved businesses $100 million to $200 million on the $2 billion repayment—didn’t pass.
 
“It was a hard sell because [legislators] had a lot on their plates,” Brinegar said. “It was a really unfortunate decision not to move forward.”

The immigration bill initially proposed revoking businesses’ licenses after three violations of hiring undocumented workers. Under the bill that passed, the penalties were lighter. Businesses knowingly hiring such workers would lose out on tax deductions related to salary and benefit expenses for those employees.

The banking industry entered the session with a lot at stake: the fate of a $250 million bank-insurance fund that Gov. Mitch Daniels had considered tapping to help bolster state coffers. Legislators avoided raiding the Public Deposit Insurance Fund, but they did give the state another 10 years to repay $50 million borrowed from that fund in 2003.

Because banks didn’t agree on a deal to forgive the loan altogether, lawmakers also exempted banks from the corporate income-tax break.

Banking lobbyists say they’ll be back next year to push for banks to receive it.

“Our bankers are going to be questioning why we’re not included in that,” Amber Van Til, vice president of government relations for the Indiana Bankers Association, said of the group’s plans for next year.

There were other disappointments for business interests, too.

A few labor bills passed, including one maintaining that workers can vote to unionize by secret ballot and another preventing local government units from setting minimum wage above state and federal levels.

But the granddaddy of all labor bills, so called “right-to-work” legislation that bars union membership from being a condition of employment, was shifted to a summer study committee. It’s an issue that’s received strong support from groups such as the Chamber and NFIB, which hope it will become a focus again next session.

They’re less hopeful about one area: local government reform. Watered-down bills creating anti-nepotism provisions and reforming township government in Marion County died on Friday.

After several years of pushing for reform, Brinegar said his group will have to get “positive signs from legislative leadership and the governor” that the issue could get traction before making it a priority in the next session.

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  • Fully agree, Preston
    Where was the business leaders on this? Totally laid low to get as much as they could at the expense of civil rights. It will prove very damaging to business in the longer term.
  • Don't Congratulate Yourselves Quite Yet
    Before you go patting yourselves on the back, legislators, remember that you ignored the testimony from several of the largest corporate employers in the state when you voted to further the cause of discrimination and bigotry against gays. That in itself will make it more difficult for major employers to bring talented and highly-educated employees into the state of Indiana.

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  1. Now if he'd just stay there...

  2. Daniel - what about the many US citizens who do NOT follow what the Bible teaches? The Hindus, Jews, Muslims and others who are all American citizens entitled to all rights as Americans?? This issue has NOTHING to do with "What the Bible says..." Keep all Churches separate from State! Pence's ongoing idiocy continues to make Indiana look like a backwards, homophobic state in the eyes of our nation. Can't we move on to bigger issues - like educating our kids?

  3. 1. IBJ should link to the referenced report. We are in the age of electronic media...not sharing information is lazy. Here is a link http://www.in.gov/gov/files/Blue_Ribbon_Panel_Report_July_9_2014.pdf 2. The article should provide more clarity about the make-up of this panel. The commenters are making this item out to be partisan, it does not appear the panel is partisan. Here is a list of the panel which appears to be balanced with different SME to add different perspectives http://www.in.gov/activecalendar/EventList.aspx?view=EventDetails&eventidn=138116?formation_id=189603 3. It suggests a by-pass, I do not see where this report suggests another "loop". 4. Henry, based on your kneejerk reaction, we would be better off if you moved to another state unless your post was meant as sarcasm in which case I say Well Done. 5. The article and report actually indicates need to improve rail and port infrastructure in direct contradiction to Shayla commentary. Specifically, recommendation is to consider passenger rail projects... 6. People have a voice with their elected officials. These are suggestions and do not represent "crony capitalism", etc. The report needs to be analyzed and the legislature can decide on priorities and spending. Don't like it, then vote in a new legislature but quit artificially creating issues where there are none! People need to sift through the politics and provide constructive criticism to the process rather than making uninformed comments in a public forum based on misinformation. IBJ should work harder to correct the record in these forums when blatant errors or misrepresentations are made.

  4. Joe ... Marriage is defined in the Bible ... it is mentioned in the Bible often. Marriage is not mentioned once in the US or Indiana Constitution ...

  5. Daniel - Educate me please: what does the Bible have to do with laws? If the government wasn't in the business of marriage to begin with, then it wouldn't have to "define" marriage at all. Marriage could be left as a personal, religious, or otherwise unregulated action, with no ties to taxes, legal status, etc. Then people could marry whomever they want, and all this silliness would go away. Remember to vote Libertarian in November.

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