By BRIAN A. HOWEY

INDIANAPOLIS – Speaker Todd Huston had just taken the gavel during the waning days of the 2020 Indiana General Assembly as the COVID-19 pandemic began to wreak turmoil across the state. Now, less than two years later, he and super majority Republicans will begin to reshape the state during what has become a persistent problem.

Facing the 150 members and Gov. Eric Holcomb are a worker shortage (including teachers, bus drivers, nurses, truckers), a state education system that still isn’t meeting the needs of employers, and a new technological revolution that will see the internal combustion engine give way to electrical propulsion that needs just a fraction of the parts that hundreds of Hoosier companies produce.

At the Indiana Chamber’s Preview session on Monday, CEO Kevin Brinegar noted the observation of new Indianapolis 500 owner Roger Penske, who expressed “surprise at how fast” the technology is evolving on electric vehicles. “Penske predicts there will be a hybrid or electrical vehicle in the Indy 500 by 2025,” Brinegar said.

On Monday, President Biden signed his signature $1.2 trillion infrastructure law that will bring more than $8 billion to Indiana to revitalize roads and bridges and $100 million to expand the state’s electric vehicle charging network.

Huston said that change is afoot “clearly around EV battery. Automotive jumps out; anything in renewable space. A very big economic shift will take place in the next three to five years. Many things that require key components are going through change. There’s no doubt change is happening fast and we have to be nimble.”

There are 519 auto manufacturing establishments in Indiana, including 23 motor vehicle manufacturing (not including two Ford assembly plants just beyond state lines in Chicago Heights and Louisville), 165 body and trailer manufacturing, and 331 parts manufacturing establishments, according to CAR.

Brinegar laid out the Chamber’s 14th annual Employer Workforce Survey that, despite two decades of trying to correlate Indiana labor needs to education output, much work remains.

“Indiana has a workforce shortage,” Brinegar said, noting that 85% say meeting talent needs is a challenge, 67% say lack of workers is the biggest obstacle, while 72% say applicants don’t meet current needs.

“The skills gap will persist due to the Great Resignation,” Brinegar said. He noted that 60% of Hoosier employers said they left jobs open due to lack of qualified workers (up from 45% a year ago); 58% will seek to increase workforce size (17% more than a year ago). He said that 72% of workers will be looking at other job opportunities.

Layered on top of the lack of workers is a shortage of child care workers, which is keeping thousands of women out of the workforce. “This is a complicated issue,” Huston said. “One of our greatest challenges is the child care industry is trying to find enough people. I won’t have a magic wand on this. There’s been a huge push federally. But you have to have the people to work.”

State Rep. Terri Austin, D-Anderson, said that child care costs more than a year of college. “It’s about $12,000 to care for a child; $9,000 for tuition,” she said. “If you want to help solve shortage, get woman back in. Twenty percent of child care centers have closed. Workers make about $12 an hour. Some of federal money has flowed in, but when Amazon pays bonuses” they go work in warehouses.

“If we’re smart,” Austin said, “We’ll take some of that $500 million surplus” and steer it into child care.

Renewable energy sitings

Another big dilemma facing legislators is the siting of wind and solar farms. Messmer said that polling shows support for a shift from coal to renewable energy ranges from 60% to 80%, but counties are throwing up siting barriers.

“People want to more see renewable energy,” Messmer said, but the perception is that renewable sources produce 50% of the state’s energy, when it is actually in the 6% to 7% range. “All of us want it to be higher, but we just can’t get there with a patchwork of regulations from local counties.”

Asked about the future of net metering, Huston said, “I would leave that topic to (Rep. Ed) Soliday and (Sen. Eric) Koch. Everything needs to be looked at and evaluated.”

Tax cuts

House Republicans are ginned up on ending the personal property tax and reducing the state’s 3.23% flat state income tax. Speaker Huston called the personal property tax “the last bad business tax we have in play.”

But several times at Monday’s Chamber preview, Huston said that he had “made a commitment clear to local officials we’re not trying to do this on their backs.”

On the income tax reduction, coming after an expected $170-per-taxpayer surplus refund, Huston said, “I certainly intend to make sure, in one way or another, we are giving back to people the money that they deserve, that they’ve earned. That is a huge priority goal for me, and, I believe, for our caucus. I think it would help a ton of small- and medium-sized businesses in Indiana and I think it’s exactly the right thing to do. I think it’s the last bad business tax we have in play.”

But Senate Majority Leader Mark Messmer wasn’t on the same page, saying on Monday, “When that federal stimulus money dries up, at this point I don’t think we can accurately predict where those tax revenues will settle out.” 

The leaders were asked if the biennial budget could be reopened during this short session due to the fact that revenues are running well ahead of projections. “It depends on your perspective,” Huston said. “We’re about $500 million ahead and we want to continue on that trajectory. This coming year, there will be a $545 million in taxpayer refund. I certainly hope we are giving back money they deserved. My biggest fear if we keep it we’ll spend it. We will have another forecast in December. That will revise our thinking. I’m not looking to be imprudent or irrational. We want to maintain enough of a reserve. Our costs are going up.”

Messmer described the Senate Majority Caucus as “extremely cautious,” adding, “Should we get another automatic taxpayer refund next June 30, that’s probably not a bad way to proceed in the short term.”

Last week, Gov. Holcomb gave an emphatic “we’ll see” on potential tax cuts.

Health care costs


Another controversial topic will be rising health care costs and vaccine mandates.

Huston observed, “I meet with too many businesses and people frustrated by health care costs. We’ve got to be better in our total cost of health care. In next few weeks, we will lay out everybody’s part of that. Hopefully we’ll set some clear expectations via metrics. Stakeholders know we need to see measurable reductions in costs.”

Messmer added, “There’s going to be a heavy commitment” on the issue, adding, “We’re well above the national average.”

On vaccine mandates, Huston said, “I’m on record I prefer to have businesses make those decisions; employers need to be cautious on how they handle religious exemptions. I would offer a level of caution on how employers address this issue.”

Messmer added, “Governments should never be in business of mandating employers,” saying that it could impact 30% to 40% of production employees. “There’s been a huge exodus of people leaving the workforce and I think that has to do with vaccine mandates. Employers are having a tough time.”

Logistics

How is the upcoming General Assembly going to operate in 2022 after the 2021 session featured a great deal of plexiglass, social distancing and masking, during the committee hearings in House and Senate chambers? “Back to normal,” said Huston at Monday’s Chamber Preview session. “You can expect a session to run much like 2020 or an earlier session.” 

This comes as there were 3,481 new Indiana coronavirus cases, highest one-day total since Oct 8, with 9.3% of Tuesday’s batch of tests coming back positive. 

The legislature is pondering a session date at the end of November or early December due to Gov. Holcomb’s executive orders on public health.  An informed and reliable source tells HPI that some $400 million in federal aid could be lost due to the way Holcomb dealt with the pandemic via executive order. That could prompt the session date at the end of the month to align with federal requirements. It comes as the unprecedented 2021 session officially ended at midnight Monday.

“When extending the last state public health emergency for another 30 days, I asked my team to bring me a plan that would allow us to wind it down responsibly,” Holcomb said on Tuesday. “They have presented me a plan that identifies three key items that must be preserved if I am to responsibly allow the state public health emergency to expire. To carry this out, I am working with Senator Bray and Speaker Huston to consider passing three key statutory changes to continue protecting Hoosiers by allowing for the continuation of enhanced federal matching funds for Medicaid expenditures, the continuation of the enhanced benefit for those receiving federal food assistance and extend the ability to efficiently vaccinate our 5- to 11-year-olds.” 

House Resolution 2 has been filed by 31 Republicans, including state Rep. Hal Slager, R-Schererville, state Rep. Julie Olthoff, R-Crown Point, and several GOP committee chairmen, making the issue all but impossible for Huston to ignore. The speaker told The Times on Monday his intention is to collaborate with the governor to identify any statutory changes that might need to be made to ensure Indiana’s COVID-19 response can continue absent an ongoing state of emergency proclamation.

Huston said at Tuesday’s Organization Day that as of right now, the next session day will be Tuesday, Jan. 4, but added, “Stand by for further instructions.”

Sen. Messmer added at the Chamber event that Senate leadership was meeting on Monday to determine how session business will be conducted. “We’re going back to normal,” Messmer said. While Huston said the House Chamber could be utilized for some committee meetings, much of the session will be conducted in past form in committee rooms.

Messmer and Huston predicted the session will end in early March. 

Supremes to hear power showdown case

The legal fight over the increased power Indiana legislators gave themselves to intervene during public health emergencies will be going before the state Supreme Court, although not for nearly five months (AP). The state’s highest court issued an order Wednesday taking over a lawsuit that Republican Gov. Eric Holcomb filed against the GOP-dominated Legislature contending that that a law granting the power violates the state constitution. A Marion County judge upheld the new law last month, ruling that the constitution gives the General Assembly the authority to determine when and for how long it will meet. Holcomb is appealing that decision. The Supreme Court’s order sets an April 7 hearing for arguments from private attorneys hired by the governor’s office and the state attorney general’s office, which is representing the Legislature. The new law establishes a process under which legislative leaders can call the General Assembly into an “emergency session.” Holcomb’s lawsuit argues that the law violates a state constitutional provision that says only the governor can call the Legislature into a special session after its annual sessions adjourn, which is normally late April in odd-numbered years and mid-March during even-numbered years.