September 2017 September 2017 Interim Update Why is President Trump coming to town? The effort to reform the federal tax code is heating up in Washington, D.C., and Indiana will get more than our fair share of attention. Similar to other yet-to-be-successful policy fights on Capitol Hill, Republicans can only afford to lose two votes before they need an assist from their Democratic colleagues. Central to the strategy of passing tax reform is to apply pressure Top Events to Democrats in tough reelection bids in 2018… such as Indiana’s own incumbent U.S. Senator Joe Donnelly. September 27 1:00pm Rm431 Based on which political prognosticator you listen to, Indiana is somewhere in the top three targets for a GOP senate seat pick-up in ‘18. We’d Interim Study Committee on prognosticate for you, but if we predicted such things correctly, President Roads and Transportation Marco Rubio would be welcomed Wednesday by Gov. Mike Pence at the Indiana State Fair Grounds. But instead, President Donald Trump will be in September 28 10:00am town Wednesday to pitch tax reform and pressure Donnelly to support it. This follows a visit last Friday by Vice President Mike Pence for the same Rm431 reason: to advocate for tax reform while helping the GOP grow a razor thin Senate majority. Interim Study Committee on Public Health The struggle for Democrats to win back the Senate is real. There is a very narrow path for Dems in 2018 so every vote on the president’s agenda counts in states like Indiana where he won big. In the news… Conventional wisdom assumes that Democrats will win the mid-terms, as President Trump to speak in Indy minority parties usually do, especially when the sitting President is… shall we say…slightly besieged. But Democrats have the misfortune of defending 25 of on Wednesday (IBJ) the 34 seats that are up for reelection in ’18, and they have to do that before Parents can begin registering kids they can think about flipping any of the eight seats held by Republicans. Of in pre-k expansion counties. (State those eight, only one is considered to be a toss-up. Not to pile on, but of the Impact Indiana) 25 seats controlled by Democrats, 10 are in states that Trump won, including Indiana. Matt Owen to run to replace The hill Democrats are climbing in Indiana, and nationally, helps explain the retiring State Rep. Steve Stemler. vicious fight for the Republican nomination, which we talk about more later. (News & Tribune) At any rate, this is a long way of explaining that you should get used to seeing Air Force One in the skies above Indianapolis over the next year. Statehouse News Interim study committees crossed the half-way point of their work this summer. The final step of this process comes over the next six weeks as these committees will complete their work and consider draft legislation to introduce in 2018. Here are some highlights from this month’s meetings. September 2017 Page 1 of 3 -- Sharing economy issues continue to vex policy makers as everything from transportation to lodging to home improvement services are impacted by new technology platforms that effect the way we use service industries. The Interim Study Committee on Fiscal Policy met last week and discussed how and whether to extend lodging taxes and fees to the popular Airbnb industry. They’re not alone: the legislature in recent years has grappled to find the balance between protecting existing industries while not interfering with innovation. The fight between Uber and the taxi cab industry was the highest profile example, but more industries are impacted every day and the consequences for policymakers are significant. Many of fees and taxes levied on services help pay for amenities in communities across the state and as those tax bases erode as consumers choose new ways to receive services not subject to taxation governments are feeling hits to the bottom line. Important questions will continue to be raised over the role of government maintaining a level playing field in legislative sessions to come. -- The Alcohol Code Revision Commission met twice this month. The high-profile issue of the sale of cold beer in gas stations was covered at length at the first meeting. The convenience store lobby made the case for the right to sell cold beer and came out in force, with representatives testifying from many of the state’s top C-stores. The second meeting was held last Friday afternoon, forcing scores of lobbyists to trade a golf shirt for a suit. The commission at the second meeting focused their attention on alcohol permits. Questions were raised over the usefulness of the current system that sets the number of permits based on population. Also at issue is whether the auction process to obtain a permit unfairly drives up the cost for liquor store owners, while grocery stores and restaurants can get a permit for far less money. If that process is reformed to lower the cost, the state must reconcile devaluing the permits for which owners paid hundreds of thousands of dollars. No easy answers coming from this process, but they have a longer timeframe than most interim committees. The commission is scheduled to complete the first year of their work in November before making a recommendation for legislation in 2018. -- The Interim Study Committee on Roads and Transportation considered whether to loosen the standards that are in place for a small contractor to be pre-qualified by INDOT. Under current law, a subcontractor can do work on a project up to $300,000 before they are required to be pre-qual’d (as they say in the business) by INDOT, meaning they’ve met a legitimacy threshold that includes a financial analysis of the firm and they’ve proven they are a bona fide sub. At least one subcontractor wants that standard lowered by raising the financial threshold to $500,000. The committee will meet again later this month and is expected to recommend that the thresholds in law be removed entirely in place of granting authority to INDOT to set qualifications as they see fit. -- Interim committees will begin wrapping up work over the next six weeks. We anticipate we’ll begin seeing legislative agendas released by the legislative caucuses and Governor Eric Holcomb beginning in November. Political Landscape The Republican primary for U.S. Senate is having a ripple effect up and down the ballot. Here are a few updates on that race: September 2017 Page 2 of 3 - Congresswoman Susan Brooks endorsed colleague Luke Messer. - Both Congressmen Todd Rokita and Luke Messer were quick to endorse President Trump’s comments about NFL players kneeling during the National Anthem. - Senator Ted Cruz went on a media tour earlier this month explaining why his twitter account “liked” a porn video. The action received so much national attention that Cruz quipped, “perhaps we should have done something like this during the Indiana primary.” This has nothing to do with the senate race, we just thought it was awesome. -- Further down the ballot, races in Indiana’s now open 4th and 6th congressional districts are starting to take shape. In the 4th district, home to your 1816 inc. team, former lawmaker and workforce chief Steve Braun officially entered the race, opening a cabinet level position in the Holcomb administration where Braun previously served. Former Pence aide Diego Morales also entered the race and is busy touring the district and telling everyone he meets that they’re “the man!”. It’s rumored that Putnam County State Representative Jim Baird is getting in the race as well, which would open up that statehouse seat for election in 2018. -- On the other side of the state, the field in the 6th district is frozen while prospective candidates await a decision from Vice President Mike Pence’s brother Greg on whether he’ll jump in. All signs point to yes. Already in the race is State Senator Mike Crider, who chairs the Senate Transportation Committee. Crider was reelected to a second term in 2016 so he runs without real risk of giving up his seat in the senate if he comes up short. -- State Senator Luke Kenley officially retired and has been succeed in his powerful role as Senate Appropriations Chairman by Senator Ryan Mishler. Hamilton County Republicans caucused earlier this month to replace Kenley and passed over establishment-ish picks for a relative newcomer to Republican politics: Victoria Spartz. If you’ve been a frequent flier at Northside GOP events in recent years, you’ve probably had a spirited conversation with Sen. Spartz, who is sure to be a high-energy legislator. Spartz immigrated to the U.S. from the Ukraine 17 years ago and is currently an MBA professor at the Kelley School of Business at IU. Contact Matthew D. Whetstone, Principal – e: [email protected] p: (317) 501- 2790 Michael R. O’Brien, Executive Vice President – e: [email protected] p: (317) 796-5710 Tyler O. Starkey, Policy Advisor and General Counsel – e: [email protected] p: (317) 694-1693 September 2017 Page 3 of 3 .