A letter to Indiana Gov. Eric Holcomb

Governor Holcomb,

Everyone said when Mike Pence began his term as Governor he had some huge shoes to fill left by Mitch Daniels. I think that was true, but I also believe you have an even bigger set of shoes to don now that Mr. Pence has left the State House.

I appreciate your work so far as Governor. We’ve met on a couple of occasions, once in your office (I was there to take photos at an event). For the first time in a while, Hoosiers think the state the is on the right track. I’m here to implore you to take your work to the next level so Indiana can leapfrog competing states.

We know from the Indiana Chamber, among others, that Indiana’s universities are powerhouses in STEM fields. Indiana’s high school graduation rate is nation-leading. Our logistics and agriculture businesses are firing on all cylinders. Tech is flourishing at a rapid pace in Indianapolis. But we also know that migration isn’t increasing. We’re barely treading water in net migration. Let’s be honest: most people don’t want to live in Indiana.

That might be because of work or family obligations elsewhere. But we know from places like Hamilton County and Kokomo that jobs follow people, not necessarily the other way around.

Let’s be honest about another point: Americans across the country think poorly of Indiana. People think Hoosiers are friendly, but not very bright. People believe that we’re too religious to a fault, too socially conservative, and incapable of being open to new ideas and societal changes.

Does everyone believe that? Of course not. Is this all a bad thing? Not necessarily. Does it matter what other people think of us? Maybe not, but net migration is significant. I think you get my point: Indiana has a severe image problem. Our brand is tarnished. People are voting with their feet and leaving for elsewhere.

If Indiana’s goal is to attract a new, modern, educated workforce, it starts with you. If we do a quick market analysis we’ll find there’s a niche not being filled by any state: “Affordable, but progressive.”

I’m not talking progressive politics in taxation or regulation. That would undo the “affordable” part, wouldn’t it? Indiana, under your leadership, can be the nation’s leader in affordability and be noticed for being truly socially welcoming, free, and contemporary. Colorado almost had this clinched, and that’s worked well for them, but their affordability is getting out of hand.

Indiana can embrace LGBT rights, responsible marijuana and alcohol laws, urbanism in its cities and towns, technology, parks, place-making, and so much more to make communities great places to live. There has to be more than just being a place to work. Like Governor Daniels said, “We have to build the best sandbox in the country.” We’ve built the sandbox, but there aren’t many sand castles yet.

Some work will require legislation. Others are simpler, like seeing you at next year’s Indy Pride festival. Your remarks on Indiana’s alcohol laws are promising, but we can’t be seen playing catch-up from a century of lousy laws.

We don’t have the best weather or significant natural landmarks like mountains or many beaches. But there’s no reason Indiana can’t have the cultural and inspirational leadership of Washington or New York and the affordability and business climate to compete with Texas. It’s a differentiation no one else is making. Will it make some people here uncomfortable? You bet. Will it be better for Indiana in 20 years? Absolutely.

I think you know that. You can set that tone for everyone to see and recognize. The House and Senate trust you, and so do most Hoosiers, to lead Indiana’s brand to the next level.




Justin Harter, Indianapolis

Lopsided Service

Lots of exciting news coming out of Marion County on the tax-front this morning.

In short, libraries and colleges are spending way too much money on useless administrators, and then they wonder where there money went. Oh, and IndyGo broke an axel wheel. And colleges are full of “mindless cheerleaders”.

In unanimously approving its $37.9 million budget Monday, the Indianapolis-Marion County Public Library board of trustees also put in motion a shortfall appeal that — if approved — will increase some property taxes.

IndyGo, another agency dependent on property taxes, also adopted a 2011 budget Monday, and it, too, will pursue a shortfall appeal as expected.

If approved by the City-County Council, the appeals would bring in $1.8 million for the library and $1.5 million for IndyGo. But for most homeowners, the increase combined would be only a couple of bucks.

I know it’s only a couple of bucks, but these problems aren’t going away and it defeats the purpose of a cap if you can just walk back to the council and say, “More please!”. They’re already talking about doing it again next year, just because they can. I was at the Irvington Library yesterday and it was mostly kids talking in circles and adults looking at Facebook and YouTube. Abdul over at RTV6 noticed the same thing. That can happen at a Starbucks. Libraries need to be rethinking their purpose in the 21st century. And why did they cut hours and services BEFORE looking at the problem they knew they had…

With one in four library employees in management positions, Torres called for eliminating high-paying, duplicate jobs to avoid reducing the library’s customer services.

“There is a need for discussion,” he said. “It’s a mess.”

I see no need for discussion. You’re top-heavy. Cut it out.

And, in further proof why this man is my hero, Gov. Daniels told Indiana’s public universities, namely IU and Purdue, they were acting like “mindless cheerleaders“:

Gov. Mitch Daniels told a large group of college trustees Monday that the days of top-heavy campuses — where administrators get the biggest slice of the budget pie — must come to an end.

“You are not there to be a mindless cheerleader,” the governor said. “Administrative costs are rising rapidly, and that is a lopsided way to deliver resources.”

The study blamed the administrative bloat on subsidies from federal and state governments and suggested that reducing subsidies would force schools to operate more efficiently.

“The role of trustee has never been so critical as it is today,” Daniels said. “But I don’t want to see you at the Statehouse asking for more money.

“Please stay back at the school and find ways to be more efficient with those dollars.”

Again, like most things in life, this is not that hard. Any sane organization or company could fix these problems in an afternoon.

The Alternative to Health Care Reform

Following up on my previous post, I should make mention that I’m not against health care for everyone. I’m not. Everyone needs it – like food, shelter and clothing. In our capitalist society, you have to have poor people (otherwise, you cease to be a capitalist society) and poor people are still people, dang it.

However, my beef with the bill passed yesterday is that it’s just some middle-of-the-road, watered down bill that doesn’t appear to do anything for anyone except those really poor people – 1 in 4 Americans – who will get dumped onto Medicare. Sucks to be one of the other 3. Would have been nice to see some real help for the middle class – you know, that group that built the damn nation that most of us live in.

Mitch Daniels was the only Republican over the last few months that seemed to offer up at least an alternative plan. It’s proven to work, works great, everyone loves the plans he speaks of – called HSAs. I had one and was a big proponent when I was working for the State. Plus, you get to use your money, real money, plus money from the State, to use on other things like glasses or dental work. This is required reading for everyone.

In Indiana’s HSA, the state deposits $2,750 per year into an account controlled by the employee, out of which he pays all his health bills. Indiana covers the premium for the plan. The intent is that participants will become more cost-conscious and careful about overpayment or overutilization.

Unused funds in the account—to date some $30 million or about $2,000 per employee and growing fast—are the worker’s permanent property. For the very small number of employees (about 6% last year) who use their entire account balance, the state shares further health costs up to an out-of-pocket maximum of $8,000, after which the employee is completely protected.

The HSA option has proven highly popular. This year, over 70% of our 30,000 Indiana state workers chose it, by far the highest in public-sector America. Due to the rejection of these plans by government unions, the average use of HSAs in the public sector across the country is just 2%.

State employees enrolled in the consumer-driven plan will save more than $8 million in 2010 compared to their coworkers in the old-fashioned preferred provider organization (PPO) alternative. In the second straight year in which we’ve been forced to skip salary increases, workers switching to the HSA are adding thousands of dollars to their take-home pay. (Even if an employee had health issues and incurred the maximum out-of-pocket expenses, he would still be hundreds of dollars ahead.) HSA customers seem highly satisfied; only 3% have opted to switch back to the PPO.

The state is saving, too. In a time of severe budgetary stress, Indiana will save at least $20 million in 2010 because of our high HSA enrollment. Mercer calculates the state’s total costs are being reduced by 11% solely due to the HSA option.

Most important, we are seeing significant changes in behavior, and consequently lower total costs. In 2009, for example, state workers with the HSA visited emergency rooms and physicians 67% less frequently than co-workers with traditional health care. They were much more likely to use generic drugs than those enrolled in the conventional plan, resulting in an average lower cost per prescription of $18. They were admitted to hospitals less than half as frequently as their colleagues. Differences in health status between the groups account for part of this disparity, but consumer decision-making is, we’ve found, also a major factor.

Practical, sensible and founded in fact. That’s good policy.

Why State Budgets Matter

Following up on California’s status as an economic disaster-hole, it begs the question of “why do state budgets matter?” Frankly, the long and short of it is if your state is broke, then by law they’re required to not be broke. The result is higher taxes and cuts. Because most governments are incapable of thinking rationally, they usually start cutting education, police, healthcare, etc. You know, the things people use and actually hired the government to deal with.

When they raise taxes, that lowers demand for services as people have less money, businesses have less funds for payroll and supplies and they cut wages and staff and, voila, you have a deeper recession. Not to mention that states cut contracts with outside vendors, thereby deepening matters more.

Again, I’m going to re-iterate that this governing things isn’t necessarily hard. Mitch Daniels saved money by buying floor mats for heaven’s sake:

[Daniels ended] bottled water for employees of the Bureau of Motor Vehicles (annual savings, $35,000). Ending notification of drivers that their licenses are expiring; letting them be responsible for noticing (saving $200,000). Buying rather than renting floor mats for BMV offices (saving $267,000 this year). Initiating the sale of 2,096 surplus state vehicles (so far, $1.95 million in revenue from 1,514 sales). Changing the state lottery’s newsletter from semimonthly and in color to a monthly and black-and-white (annual savings, $21,670).

Note, this was in 2005 after 1 year in office. I’d also mention that I’d go as far as to eliminate newsletters, period. Who reads newsletters!? Get a website!

And, the BMV now reminds people about expiration notices electronically, for practically nothing, via email for Hoosiers enrolled in MyBMV.

States have money to burn and money that can be saved and refunded to taxpayers. They just need to step up and deal with it. Don’t tell me the Feds don’t have a few newsletters that can be chucked.

California Now Officially Worse than a Developing Country

Just in from the West Coast:

California’s debt is seen by investors as riskier than Kazakhstan’s, according to Bloomberg News. Five-year credit default swaps tied to California’s debt, which are a key measure of the market’s belief in the likelihood of default, are actually trading at 100 basis points above those of Kazakhstan. In other words, the market believes a developing country of just 15.7 million people is actually less likely to default on its debt than California, which makes up the eighth-largest economy in the world.

And last week, Jamie Dimon, the CEO of JPMorgan, the nation’s second largest bank, warned that California’s $20 billion budget gap could pose a bigger risk than the Greek debt crisis.

In other news, here in the Midwest, where rational people live:

During the fat years of the mid-2000s, while most governors went on spending sprees, Indiana Gov. Mitch Daniels was trimming Indiana’s payroll, slowing the state government’s growth, and turning a $800 million deficit into a consistent surplus. Now that times are hard, his fiscal rigor is paying off: the state’s projected budget shortfall for 2011, as a percentage of the budget, is the third-lowest in the country.