Indiana Fiscal Policy Institute seeks comeback

September 5, 2009

In its heyday, the Indiana Fiscal Policy Institute developed a reputation for framing major statewide issues with hard facts and figures that conservatives and liberals alike agreed were sound.

That was a long time ago. The not-for-profit has been on life support since former CEO Steve Johnson resigned in August 2007. Now, the institute’s board has hired Indianapolis Star business columnist John Ketzenberger to engineer resuscitation.

“A lot of people have completely forgotten about the Fiscal Policy Institute. But John Ketzenberger is on the tip of everybody’s tongue,” said Indiana Legislative Insight Publisher Ed Feigenbaum. “If somebody can restore its prominence, John certainly would be able to.”


Ketzenberger, 45, is a former IBJ managing editor who has been The Star’s principal business columnist since 2005. He also serves as a panelist on “Indiana Week in Review,” which airs statewide on public radio and TV stations.

Ketzenberger said he plans to approach his new role as a journalist or scientist would, following the institute’s tradition: facts first, conclusions last.

“There are 150 legislators with 150 opinions and many more in the [Statehouse] hallways for how things should be done,” Ketzenberger said. “IFPI can be a nonpartisan, unbiased voice in the debate.”

Since its founding in 1987, the Indiana Fiscal Policy Institute has analyzed subjects as diverse as Indiana’s tax policy, state budget, school funding, technology progress, daylight-saving time, the college brain drain, welfare and Medicaid reform.

If he’s to revive that tradition in time for the General Assembly’s 2010 session, Ketzenberger will have to work quickly. Organization Day is less than three months away.

Ketzenberger said he hasn’t settled on the institute’s agenda, but the organization already has a major research paper in production. He hopes to eventually explore questions such as gambling tax structure and the increasing impact of public referendums.

The institute always has been a small organization. Ketzenberger will be its sole employee, and will outsource projects to impartial, free-lance researchers.

Despite its shoestring staffing, the institute frequently has enjoyed enormous influence. For example, its research into the financing of teacher, police and firefighter pensions in the late 1980s and 1990s eventually persuaded legislators to change state law.

Previously, the state allowed pension money to be invested only in bonds. Taxpayers were responsible for the remaining retirement benefit liability. Diversifying the pensions into stocks has generated billions of dollars in investment returns over the last decade, although large portions of those gains were erased in the economic downturn.

Similarly, the institute was among the first to anticipate the problems property taxpayers would suffer as Indiana moves to a market-based assessment system.

But Ketzenberger’s challenge will involve more than identifying major public policy questions and producing top-flight research. He must also breathe new life into the organization’s finances. At the time of his departure, Johnson complained that he’d been forced to devote most of his time to fund raising, not policy analysis.

Internal Revenue Service records show the institute reported $164,369 in revenue, all from donations, for 2007, the most recent year available. The not-for-profit booked a $108,673 surplus that year, mainly because it had no executive director and conducted little research.

Over the four prior years, the institute lost a combined $335,563, with revenue falling each year. Earlier records weren’t available.

The institute’s donors, once counted in the hundreds, have slipped to a handful. Ketzenberger hopes to broaden that base using the same shoe leather he once applied to beat reporting.

“You have to have good research, and you have to pay for it,” he said. “It’s my goal to reach all parts of the state and meet with CEOs, top labor people, trade associations, interest groups and the university community to convince them to support the Indiana Fiscal Policy Institute’s mission of nonpartisan research.”

Ketzenberger will have a mentor as he attempts to revive the organization. Earl Ryan, its first president, is preparing to retire as president of the Levonia, Mich.-based Citizens Research Council.

Ryan, who led the Indiana institute from 1987 to 1994, is glad to see its revival.

“Without an organization like Indiana Fiscal Policy Institute, you tend to get only the information that government wants to provide, or that the proponents or opponents of an issue want to provide. And you may not find the real story in any of those,” Ryan said.

“It’s the role of the Indiana Fiscal Policy Institute to make sure issues are clearly and concisely and objectively defined.”

Ryan is intimately familiar with the challenge of getting donors to pay for objective research that may—or may not—directly benefit them. It’s a tightrope Ketzenberger must tread carefully, with cash on one side and credibility on the other.

“The main attribute that these organizations have that distinguishes them is their independence. That means not being beholden to any group or consortium or interest, and calling it as you see it. That’s not always easy to do, particularly for an organization that’s trying to rebuild its funding base,” Ryan said.

“Tears well up in my eyes when I think about how much money I’ve turned down over the years from people who would like to pay us to do something that might be in the public interest, but would certainly be in their interest.”•



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