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May/June 2016 – BizVoice/Indiana Chamber
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Economic Development and Labor
The Regional Cities program expansion was a
positive step, but unfortunately the two biggest
wasted opportunities were also in this area.
HIT:
Additional funding ($42 million) for a third
Regional Cities award due to the success of the
tax amnesty program. As it stands, the South
Bend, Fort Wayne and Evansville regional
proposals will be funded and the potential exists
for the program to expand further in the 2017
budget-writing session.
MISSES:
Failing to pass civil rights legislation for
the LGBT community doesn’t put Indiana in the
strong position it could have been, or arguably
needs to be. Indiana must be seen as a welcoming
place for all in order to retain and recruit top talent,
new business investment and tourism. Despite
bipartisan support, implementing a work share
program barely even got out of the starting gate.
Work share would benefit employees, employers
and communities during an economic downturn.
OUTLOOK:
“It is unclear how the LGBT civil
rights issue will be addressed going forward,
except that several cities and towns will be passing
local civil rights ordinances in the near term in the
absence of a statewide solution,” Brinegar offers.
“While this proved a bridge too far for legislators
to cross in this election year, all of our state leaders
ultimately must find a way to work together to
craft a solution.”
The optimism for work share is far less at this
point. “It’s hard to say what it will take to get the
administration on board with work share.
Partnering with the Indiana Department of
Workforce Development (DWD) on a study
clearly didn’t do it,” laments Mike Ripley, Indiana
Chamber vice president of health care and
employment law. “Failing a change of tone by
DWD, we are fighting an uphill battle on an issue
that seems like a no-brainer to the Chamber and
many legislators in both parties.
Bills Removing Uncertainty
Too often ambiguity exists or not addressing a potential problem is left for the
next time, but this year three successful proactive policies made current law more
clear and hopefully effective.
HITS:
Reform of the practice known as
lawsuit lending
, including setting
interest rate caps.
Lawsuit lending is where a third party finance company loans money to a plaintiff
in anticipation of a favorable settlement in a lawsuit. The finance companies justify
a high interest rate because if the plaintiff does not win the suit, there is no
requirement to repay the amount financed/loaned.
Raising the total caps for
medical malpractice
claims from $1.25 million to
$1.65 million. An increase to a $1.8 million cap occurs after December 31, 2018.
More appropriate
property tax assessments
of large retail facilities – aka “big
box” stores – that will save the overall business community hundreds of millions
of dollars due to not having to make up the difference for those undertaxed.
OUTLOOK:
“The Chamber has always maintained that lawsuit lending has an
adverse impact upon the settlement/litigation process. Now, more plaintiffs will
be encouraged to settle and that will decrease court time and expenses for
everyone involved,” Ripley affirms.
“Hospitals and trial lawyers have been concerned that since Indiana had not raised
the medical malpractice caps in more than 17 years, it was possible that the courts
could rule that our system was unconstitutional. Meanwhile, the Chamber didn’t
want to do anything too extreme that might harm the system,” he describes. “The
new cap increases hit that necessary sweet spot and should be enough to alleviate
unconstitutional concerns while at the same time not jeopardize the stability of the
medical malpractice system.”
The “big box” fix – the second one in as many years – may or may not be the last
one we see in the short term, explains Bill Waltz, the Indiana Chamber’s vice
president of taxation and public finance.
“Ultimately, this issue will not be settled until an appeal or two go before the Tax
Court and it is forced to look at purported comparable sales to determine whether
that sold property is in the same market segment as the property under appeal.
“It will not be until this plays out that the concept of ‘market segmentation,’ as
laid out in the new law, will have real meaning and definition in practical terms.
“At that point, the issue could come back to life, because somebody – either the
assessor or the taxpayer – will not be happy,” he surmises. “But just maybe, if the
new market segmentation approach works as desired, neither party will be so
aggrieved that they will feel the Legislature needs to take up the issue again. Let’s
hope it works out that way.”
The Indiana Chamber’s Mike Ripley (left) talks
policy in the Statehouse halls.