November 20, 2020 TOP STORIES Chamber's Top 5 Legislative
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November 20, 2020 TOP STORIES Chamber’s Top 5 Legislative Priorities for 2021 Focus on Economic Recovery The Indiana Chamber is asking the state General Assembly to take steps in 2021 to reinforce Indiana’s status as an economic leader in order to help businesses and their workers emerge from the prolonged pandemic. We unveiled the specific policy actions (www.indianachamber.com/priorities) that will have the most impact on Indiana’s economic recovery at our 2021 Indiana Legislative Preview (www.indianachamber.com/preview) on Monday: • Enhanced legal liability protections for Hoosier businesses if an employee, customer or other person contracts the COVID-19 virus after returning to work or visiting the business • Raising the state’s cigarette tax to discourage smoking and vaping, plus shore up the state’s finances • Establishing a work share program that will allow employers to maintain a skilled stable workforce during economic downturns, like what has happened during the current pandemic • Increasing incentives for attracting remote workers to Indiana to help mitigate the projected losses to its workforce over the next decade (due in large part to Baby Boomers retiring) • Additional state efforts to further prepare Indiana for the digital economy, including continuing to bring high speed broadband to all corners of the state The pandemic was unforeseen and state funds have dwindled, but Indiana is in better position than most and can take charge of how it makes its way back. Separately, businesses should not be penalized for the pandemic in the form of paying more taxes or fees. Too many companies have closed and more are barely hanging on. Instead, businesses and the workforce need as much certainty and targeted assistance in the form of incentives and opportunities. That’s how we can protect employers and employment, and start to get more back to normal. The Chamber is pleased that protecting businesses and institutions from legal liability regarding COVID-19 is also a priority of legislative leadership. Caucus leaders noted at our virtual Legislative Preview that a bill hopefully will be passed early on in the session. Incentives around remote workers and further preparing all areas of the state for new technology are no longer an option but required. Broadband connectivity – and ultimate consumer adoption – is becoming as important an infrastructure need as water and electricity. That is also something we know legislative leaders are wanting to further address, especially with the surge of remote learning and working due to the pandemic. Two long-standing priorities we have pushed for several years reappear on our list and seem to have their best chance of occurring in 2021: raising the cigarette tax and the state implementing a work share program. Indiana’s smoking rate is fourth highest in the U.S., and our cigarette tax is the lowest in the Midwest and 37th lowest in the nation. Beyond the obvious health care advantages for a state lacking in positive health outcomes, there is a critical need for the state to replenish its general fund. The so-called sin taxes, like on tobacco, are a likely place for lawmakers to start. Work share legislation has yet to be voted on by the House or Senate; the Indiana Chamber sees support building for the state to join the 28 others in enacting this common-sense employment policy. Under a work share program, employers can reduce hours without full layoffs, enabling workers to keep their jobs (and benefits) – which, over time, could be returned to full-time status once economic circumstances improve. We don’t know how long this recovery is going to take or if there will be more downturns along the way. What we do know is that if Indiana had a work share program currently in place, federal CARES Act money would have covered ALL the unemployment benefits for employees on work share through the end of the year. As it is, the state’s unemployment insurance trust fund had to pay tens of millions of dollars in the benefits for those employees. This, in turn, caused the fund to be depleted faster and the state to borrow more money from the federal government than it would have if Indiana had enacted a workshare program. We can’t afford to get caught without a work share program again. The detailed rundown of the Chamber’s legislative initiatives – for 2021 and long term – is available at www.indianachamber.com/priorities. Resource: Kevin Brinegar at (317) 264-6882 or email: [email protected] New Indiana Chamber Study Provides Needed Direction for State Energy Plan Five potential scenarios for the evolution of Indiana’s crucial electricity sector and a series of principles and recommendations for the state to follow are featured in a new Indiana Chamber of Commerce Foundation study, which was released yesterday. Powering Indiana’s Economic Future (www.indianachamber.com/studies) is a comprehensive look at energy usage and related issues past, present and future. It was produced by London Economics International (LEI), a global firm specializing in energy and infrastructure analysis. Development of a thorough energy plan for Indiana is long overdue. This study provides the details necessary to guide the state’s work in this area – to best position Hoosier companies and citizens to enjoy affordable and reliable electricity. Growth is projected for distributed energy resources (DERs), which are generation and storage that provide capacity close to the source (rooftop solar, wind, battery storage and more). A DER-centric pathway is one of the five scenarios outlined – with enhanced status quo, baseload preservation, aggressive decarbonization and competitive wholesale market being the others. The study finds that Indiana’s average electricity rates (2.9% increase per year from 2010-2019) are growing more rapidly than the national average, affordability is declining and reliability is lower than national norms. Reasons cited are flattening demand, replacing and maintaining aging infrastructure and necessary investments to comply with federal environmental regulations. Despite a decline in Midwest and national cost rankings, the study notes the “percentage difference between prices in Indiana and the top-ranking state in both years has not changed significantly.” It adds that the “change in relative status may be partly a matter of timing. Going forward, it is reasonable to assume that … rates in some states may begin to rise at a rate faster than Indiana’s (where significant investments and upgrades have already been made).” Ron Christian, co-chair of the broad-based advisory council for the study and longtime leader with Evansville-based Vectren, now a CenterPoint Energy Company, offers that “incredible and fast-paced change is occurring within the energy industry The development of new technologies and evolving customer preferences for ‘cleaner’ energy are on a collision course with our longstanding, reliable homegrown energy in the state. “This study presents a balanced perspective on these competing interests and provides a valuable framework on how best to navigate this changing environment.” LEI forecasts lower electricity price growth over the next decade than what was experienced in the past 10 years. Additional environmental regulations, expansion of energy efficiency efforts and the potential for DER emergence are factors placing upward pressure on prices. Downward impacts include low natural gas prices and the declining costs of renewables. “Indiana is the most manufacturing intensive state in America, so it is imperative that we maintain a competitive business environment that allows our manufacturing sector to create new jobs and add investment,” adds Tom Easterday, study advisory council co-chair and former executive with Subaru of Indiana Automotive. “Addressing how we power Indiana’s future is an important step toward ensuring affordable and reliable energy for Indiana that can help keep our state competitive.” Electricity generated by coal decreased from 93% in 2009 to 59% in 2019. The study finds that an additional 7.7 gigawatts of coal is expected to be retired by 2028. Growth is projected to continue in the areas of natural gas, solar and wind generation. Indiana generated 6% of electricity from renewables in 2019; while further capacity remains, researchers offer the reminder of the limitations of intermittent sources of power. LEI also looks at Indiana’s overall industry and government regulatory structures, regional comparisons and analysis, and additional issues that impact ratepayers. It notes the significant implications and uncertainty of COVID-19 on demand and planning processes. Strengths and advantages for Indiana, according to the study, include its location (crossroads of networks), overall resource potential, strong in-state analytical capabilities and flexibility as a result of its high proportion of industrial usage. Going forward, it is strongly recommended that “legislation should avoid being too prescriptive and should instead delegate responsibility for enforcement to regulatory bodies wherever possible.” A list of key principles also includes, in part: • Maintaining a technology and ownership neutral approach • Acknowledging that DERs will provide a form of competition regardless of whether the market is unbundled • Relying on lessons learned from other jurisdictions • Avoiding any sudden policy movements Indiana continues to be one of the top business climates in the Midwest and one of the best in the nation. How our state plans for its energy needs and establishes a reliable, cost-effective and evolving energy system is critical to our state’s economy. The Indiana Chamber initiated the study to identify key issues, gather data and project future scenarios in order to help policymakers grapple with this critical topic. The full study and executive summary are available at www.indianachamber.com/studies. Resource: Greg Ellis at (317) 264-6881 or email: [email protected] IN OTHER NEWS Education and Workforce Development State’s First Secretary of Education, Chief Equity Officer Announced On Thursday, Gov.