INDIANAPOLIS – If there is a ticking time bomb or two awaiting Gov. Eric Holcomb during this biennial budget session, it would be the teacher pay issue and his push for a hate crimes bill to land on his desk.

During his third State of the State address Tuesday, Holcomb fully enjoined both issues. On the first, he won some praise from the super-minority Democrats for the administration’s resourcefulness in finding funds for a proposed 4% raise over the biennium. On the second, the small social conservative wing of the GOP sat on their hands when Holcomb said he would push for a hate crimes law, while the wider chamber erupted in applause.

“It’s time for us to move off that list,” Holcomb said of Indiana being one of only five states without such a law. “I look forward to working with the General Assembly to achieve this goal so that our state law reflects what’s already in my administration’s employment policy.” The conservative wing of the GOP fears the elevation of LGBT protections in state code.

The teacher pay issue has surfaced in other red states such as West Virginia, Kentucky, Oklahoma and Arizona. There was a strike in West Virginia lasting about two weeks involving 20,000 teachers and school employees last winter that impacted 250,000 students. That strike inspired teachers to take similar action with teachers in Kentucky and North Carolina orchestrating coordinated protests and walkouts.

The Holcomb administration was adroit enough to realize the potential strife and commenced talks last summer with the Indiana State Teachers Association (ISTA). By the time Holcomb rolled out his agenda in December, ISTA President Theresa Meredith seemed to be on board, with Holcomb praising the organization for its willingness to come to the table. The two posed for pictures at Traders Point Creamery.

But what Holcomb described in early December was a two-biennial budget process. “Now we have to make sure the numbers work and the revenue is there,” Holcomb explained. “We’re being very not just methodical, but careful to get this right, and every time you move one piece of the puzzle it affects another.”

Meredith pushed back on the governor’s adjustment. “Teachers need to be valued, respected and paid as professionals,” she said. “Elected leaders must do more to declare teacher compensation a priority in this session. This issue can’t wait. We expect action in 2019. Many teachers have gone as many as 10 years without a meaningful pay increase, all while facing increased insurance costs, paying for their own classroom supplies and taking on second and third jobs just to make ends meet.” She hinted at a potential job action if raises weren’t in the works this session.

Exercising message discipline, Meredith told WTHR-TV, “Their actual pay year-to-year has stayed the same or the pay increases have been very minimal and have been eaten up by costs for health care. All while paying for their classroom supplies and taking on second and third jobs just to make ends meet.” She cited the teacher shortage, noting that a recent Indiana Department of Education survey found 35% of new teachers leave the profession within five years.

“ISTA’s top priority this legislative session is improving teacher compensation and advancing the teaching profession,” Meredith said. “We thank Gov. Holcomb for sharing this as a priority. Along with the governor, we urge the legislature to take action and provide funding that leads to competitive salaries for all Hoosier teachers. This issue is urgent as every child deserves to have a caring and qualified teacher in their classroom.”

Holcomb expressed some surprise at the pushback, wondering why the ISTA rank and file wasn’t on the same page with its leadership. But since the Dec. 14 budget forecast, the administration has worked to come up with more funding. During his State of the State address, Holcomb said, “One way to attract and retain more of those teachers is to make teacher pay more competitive. In my budget proposal last week, I requested K-12 education funding increases of 2% for the next two years. That’s a 4% increase and equates to $432 million more than today.”

The governor vowed to send more than $572 million new dollars to K-12 schools over the biennium. How did he do it? It was more than Bullwinkle pulling Rocky out of his hat.

Holcomb said he would seek $140 million to pay off teacher pension obligations. “Just like paying off your mortgage frees up money in your personal budget, this state investment will save all local schools $140 million over the biennium with continued savings thereafter,” Holcomb said in remarks released in advance of the speech, according to Tom Davies of the Associated Press. The extra money would amount to about 1% more funding to Indiana school districts, which are receiving an estimated $7.16 billion in state funding this school year. 

“I believe local school districts should allocate 100% of the $140 million to increasing teacher paychecks,” Holcomb concluded.

Democrats had proposed tapping into the state’s $1.8 billion reserve. But with the potential for a recession, Holcomb and legislative fiscal leaders were extremely reluctant to go that route. The last thing any Republican wants to do is risk the state’s AAA bond rating, which is a staple in any description of the “State That Works” via the “Party of Purpose,” or find the need for a general tax hike.

It was a creative way to defuse a potential policy and political friction point.

House Minority Leader Phil GiaQuinta called Holcomb a “quick study” for finding a way to increase educators’ salaries so shortly after his office had set out to research the issue. He added that it would ultimately fall upon the legislature to ensure that the $140 million in school funds to be freed up under the pension funding plan will actually go to teacher pay as the governor hopes. 

Speaker Brian Bosma and Senate President Pro Tem Rod Bray were aligned with Holcomb’s goals. Praising Holcomb, Bosma said, “He could’ve spent a lot more time talking about the great place that Indiana is in today – and he said a little bit of that – but most of his discussion was about aspirations.” They both agreed that the agenda outlined by Holcomb was very much in line with the legislative plans established by their caucuses. 

As for hate crimes, Holcomb made his case late in the speech. “Finally, we will not slow our efforts to modernize state government to better serve our citizens and businesses alike. But, truly serving all our citizens requires more than increasing our efficiency. Indiana is one of five states that does not yet have a bias crimes law. It’s time for us to move off that list.”

Holcomb continued, “I look forward to working with the General Assembly to achieve this goal so that our state law reflects what’s already in my administration’s employment policy. Businesses interested in Indiana care about this issue, but it’s not just about business. At its heart, this has to do with people’s dignity and how we treat one another. Standing strong against targeted violence motivated to instill fear against an entire group is the right thing to do. So, let’s strengthen our state laws by ensuring judges can sentence more severely when a group is targeted, even though there may be only one actual victim. With your help, and only with your help, we can do this.” 

On areas where Republican members disagreeing with the governor is anticipated – with hate crime legislation being singled out – both Bray and Bosma said everyone’s focus is on compromise. “I didn’t hear a line being drawn,” Bosma said. “I didn’t hear him say ‘my way or the highway.’ That’s not his style. So, he’ll look to persuade and to convince, and we’ll respond to that.”

Bosma noted that there was room for members of his caucus to dissent over hate crime legislation, noting that 70% of that caucus is from “rural Indiana.” In 2014, it was rural legislators like Rep. Kevin Mahan and Tom Saunders who turned the tide against the House Joint Resolution that would have put the marriage constitutional amendment on the ballot that year. With a language change, the constitutional amendment was delayed prior to the U.S. Supreme Court ruling that legalized such marriages across America.

The coming hate crimes debates could rekindle some of those social flashpoints within the sprawling majority caucuses, but Holcomb was working on consensus Tuesday night and he just might have the numbers to defuse the two biggest political problems he faces.

Full throttle up

Holcomb kicked off his third State of the State address Tuesday night with a statewide television audience, proclaiming “Indiana is on a roll” but to stay competitive, added, “we must throttle up.”

He pointed to a higher than national average labor participation rate, saying, “There are more Hoosiers working today than at any time in our state’s history.” He said the state has tripled foreign investment and added, “Statewide tourism is up, wages are up, in-migration is up, home sales are hot, building permits have surged, and our tech ecosystem is growing.

“Global connectivity, robotics, artificial intelligence, big data, machine learning and non-stop technological advances are permanent features of the future of work, workers and the workplace,” said Holcomb, who is grappling with the fact that 45% of the state’s workforce will be retiring in the next decade as the Baby Boom bulge moves through. “We simply cannot just maintain our course. Instead, we must throttle up. Two years ago, we burst off the starting line and kept the pedal to the metal ever since.”

To that end, Holcomb said, “I will once again pursue exempting military pensions from our state income taxes so we can attract and retain talented patriotic veterans, who we know are some of the most experienced, focused and loyal workers anywhere.” He vowed to “expand our Workforce Ready Grant program to continue our push to get more adults to complete degrees or certificates in high-demand industries.” He added he is seeking to double the funding for the Employer Training Grant.

Holcomb vowed to expand broadband service to hundreds of thousands of Hoosiers without access to high-speed internet as part of his infrastructure package. “We’re accelerating regional road projects like completing I-69 three years ahead of schedule. We’re pursuing transformational rail projects in northwest Indiana, a fourth water port in southeast Indiana, and we’re working to make Indianapolis the Midwest destination for nonstop international flights,” Holcomb said. “But we’re about more than ports, planes, trains and automobiles. The internet is just as essential to our prosperity today as highways were a century ago, and we have far too many Hoosiers without access to affordable high-speed broadband.

“When I was visiting one of our towns, someone said to me, ‘Eric, if you come by our Starbucks between 7 and 9 at night, you’ll see parents with their kids doing their homework, because they can’t get wi-fi at home,’” Holcomb explained. “Another Hoosier told me, ‘Kids in my town go to McDonald’s to go online.’ Nothing against large coffees and Big Macs. I’m a fan of both. But all students should be doing their homework at home. So, we’re making the largest single investment in broadband in our state ever.”

He is also investing in bike trails and other amenities to attract a vibrant workforce. “To help more people enjoy the diverse outdoor beauty of Indiana, we’re also making the single largest investment in our state’s history to expand our hiking, biking and riding trails,” he said of what he hopes to be a $90 million initiative. “Because we all know that today, people often choose where to live before they choose where to work, and these amenities matter.”  

As for the opioid crisis that resulted in 1,700 Hoosier overdose deaths in 2017, Holcomb said, “Our new 211 Open Beds program has made more than 4,000 referrals for treatment services and support groups, connecting people quicker than ever, which can mean the difference between life and death.”

He said the number of opioid prescriptions is down, communities are forming their own systems of care, and, “We are getting drug data faster and more accurately than ever before. But better data means we have more information about the extent of the issue, and it shows we still have a long way to go. To get there, this year we’ll improve access to quality treatment, expand recovery housing, and provide better services for pregnant women who are substance dependent. We will keep working 24-7-365 to get more of our Hoosier neighbors on the road to recovery.”

These and other issues await Indiana’s governor this legislative session as 2020 approaches.