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9/25 Torchbearer Weekly Policy Update

Welcome back! We hope you enjoyed your weekend. Thank you for allowing us to be your trusted source for news at the local, state, and federal levels.

Local, state, and federal highlights in this week’s memo include:

  • Indiana Senator Jack Sandlin passes away
  • Push for high-tech plants drives up cost of incentives
  • Congress continues AI conversations
  • Department of Defense awards Indiana $33M for regional innovation hub
  • Feds hold off on rate hike
  • Looming child care cliff
  • Indiana takes a break on state’s pension benefit increase
  • DOE releasing simplified FAFSA application
  • The small business boom
  • Share the Torchbearer Newsletter with Your Network!
  • Important Dates

Let’s dive in.

Indiana Senator Jack Sandlin passes away

State Sen. Jack Sandlin of Indianapolis has died, GOP officials said Wednesday evening. He was 72.

  • Sandlin, a Republican who represented District 36, including parts of southern Marion County and northern Johnson County, was a retired Indianapolis police officer who served on the Indianapolis City-County Council from 2010 until he was elected to the Indiana Senate in 2016.

What they’re saying:

  • “Jack lived a life in service to his community,” said Marion County Republican Party Chairman Joe Elsener in a statement. “His voice and impact on our city will certainly be missed.”
  • “Indiana lost a true public servant,” Indiana Gov. Eric Holcomb said in a written statement. “Sen. Jack Sandlin was a gentleman who devoted his life to serving others, in public safety on the front lines and in our State Senate. His clear voice and integrity will be missed. Our thoughts and prayers go out to his family and all those who became close to him over the years.”

Funeral arrangements can be found below:

  • Thursday, September 28

3-7 p.m.
Public visitation
G.H Herrmann Funeral Home
5141 Madison Avenue
Indianapolis, IN 46227-4239

  • Friday, September 29

9 a.m. to 12 p.m.
Public visitation
Indiana Statehouse

12 to 12:30 p.m.
Memorial service
Indiana Statehouse

  • Saturday, September 30
    10 a.m.
    Graveside service and burial
    Indiana Veteran's Memorial Cemetery
    1415 North Gate Road, Madison IN 47250


Push for high-tech plants drives up cost of incentives


What’s new: National efforts to boost computer chip and electric vehicle production are fueling a bidding war among states, including Indiana, that is driving up the cost and number of “megadeal” incentive packages exceeding $50 million.

State of play:

  • Earlier this year, the Indiana Economic Development Corp. offered a $120 million incentive package for an unnamed auto-parts maker looking to construct a $3.2 billion manufacturing facility in north-central Indiana that will employ an estimated 1,400 workers. That equates to the state paying roughly $85,000 per job.
  • Last year, Indiana offered $186 million to automaker Stellantis for a $2.5 billion electric-vehicle battery plant in Kokomo, which is expected to open in 2025 and create up to 1,400 jobs. The subsidy package for the Stellantis plant in Kokomo equates to $132,000 per job.
  • Minnesota-based semiconductor manufacturer SkyWater Technology is building a $1.8 billion R&D and production plant adjacent to the Purdue University campus in West Lafayette. The project is expected to result in 750 high-wage jobs within five years of opening, according to the IEDC, which plans to support the project with more than $76 million in incentives—about $101,000 per job.

Why it matters: Some economists are asking the question of whether the benefits are worth the price. Michael Hicks, director of the Center for Business and Economic Research at Ball State University, said Indiana should be paying closer to $20,000 per job for the unnamed auto-parts maker project, which he said is roughly how much average workers employed there would expect to pay in taxes over the next 30 years.

The bigger picture: Nationally, last year was a record-breaker in terms of mega economic development deals. Indiana is ranked as one of the nation’s most business-friendly states, but it fails to meet the mark when it comes to availability of skilled workers to fill what the IEDC calls “future-focused” jobs.

What they’re saying: “You can bring in high-tech industries, but you also need the workers for those industries,” Gerald Cohen, chief economist at the Frank H. Kenan Institute of Private Enterprise at the University of North Carolina at Chapel Hill, said. “Indianapolis has some of those, but it’s not showing as a place where, if I were a business, I would immediately look to move.”

What’s next: Indiana leaders are working to change that narrative. We are likely to see an effort to boost the state’s workforce via legislation during the 2024 legislative session. (IBJ)

Congress continues AI conversations


Indiana Sen. Todd Young is part of a small group of senators leading the conversation around governmental regulation of AI.

Catch up fast: The Senate's first AI insight forum last week, led by Majority Leader Chuck Schumer, featured tech heavy hitters like Elon Musk, Bill Gates and Mark Zuckerberg and more than 60 senators from both sides of the aisle.

Why it matters: The event strengthened Washington's consensus that government must take a strong hand with the new technology — even as the likelihood of immediate action remained low.

State of play: Bipartisan forums hosted by Schumer, Young and Sens. Mike Rounds and Martin Heinrich will continue throughout the fall while legislative work ramps up at the committee level.

What Young's saying: "As Congress explores key policy issues related to AI, we should identify areas where existing law does not address potential AI-specific vulnerabilities," Young said in a statement released after the forum, "but we also must ensure policymakers don't overregulate and limit AI's benefits to our society, economy, and national security."

What's next: Schumer told Axios the next Senate AI forum will focus on how the government can encourage innovation to mitigate AI risks and unleash its potential. (Axios)

Department of Defense awards Indiana $33M for regional innovation hub


What’s new: Indiana is one of eight states selected for a regional technology and innovation hub that will be part of a federally funded national network of centers supporting domestic production of microelectronics, semiconductor manufacturing and other advanced technologies, the U.S. Department of Defense announced Wednesday.

The details: Indiana’s winning application was submitted by Silicon Crossroads Microelectronics Hub, a consortium of stakeholders from Indiana, Michigan, and Illinois in the microelectronics and research sectors. The Silicon Crossroads Microelectronic Commons Hub will receive $33 million in federal funding, Deputy Secretary of Defense Kathleen Hicks said.

What they’re saying:

  • “The microelectronics commons is focused on bridging and accelerating the lab to fab transition, that infamous ‘valley of death’ between research and production,” Hicks said in a press conference Wednesday. “President Biden’s CHIPS Act will supercharge America’s ability to prototype, manufacture and produce microelectronics scale.”
  • “The Naval Surface Warfare Center located at Crane, Indiana, plays a significant role in the DoD’s microelectronics strategy to build American dominance in microelectronics production and development,” Governor Eric Holcomb said, adding that it “builds on the Midwest’s strengths in research and development as well as workforce training at all levels, to build a domestic semiconductor industry, a national security imperative to keep our nation ahead of our adversaries.” (IBJ)

Feds hold off on rate hike


The Federal Reserve elected to leave interest rates unchanged Wednesday, and issued new projections indicating most officials anticipate one more interest rate hike this year.

Why it matters: The central bank's 18-month campaign to slow inflation sent convulsions through financial markets and put economists on high alert for a recession. That campaign now appears to be coming to a close, though rate cuts appear far off.

Details: The Fed's policy-setting Federal Open Market Committee elected to leave the federal funds rate unchanged at a range of 5.25% to 5.5%, while mostly repeating language from previous statements describing the rationale for the move.

What he's saying: Fed chair Jerome Powell continued to stress that policy makers want to see further improvements in inflation.

  • "We want to see that these good inflation readings that we've been seeing for the last three months, we want to see that it's more than just three months," he said at a press conference Wednesday afternoon.
  • "Given how far we've come and how quickly we've come, we're actually in a position to be able to proceed carefully as we assess the incoming data, and the evolving outlooks and risks, and make [interest rate] decisions meeting by meeting," he added. (Axios)

Looming child care cliff

Screen Shot 2023-06-07 at 11.48.02 AM

In less than a week, the U.S. will fall off a "child care cliff." That's when pandemic-era funding for the industry runs out.

  • As many as 70,000 centers, looking after 3.2 million children, may close after the funding runs out, according to a widely cited estimate from The Century Foundation.

Why it matters: The cliff is approaching just as women, particularly mothers, are hitting their stride in the labor market.

  • Workforce participation is at new highs for working mothers, and the employment gap between men and women is at record lows.

Zoom in: If the dire forecasts prove true, millions of parents — particularly mothers — are going to be left with some hard choices.

  • Their child care provider could shut down or raise prices past affordable levels. Many parents could exit the job market entirely.

What's next: When the bandage comes off, the state of child care in the U.S. is likely to be even worse than it was before 2020. (Axios)

Indiana takes a break on state’s pension benefit increase


What’s new: Indiana lawmakers enraged retiree advocates when they chose not to offer a pension benefit increase in the most recent budget cycle — for the first time in decades.

  • Instead, they’re taking the period between legislative sessions to hunt for a lasting fix. It’s a decision worth millions of dollars, and that impacts thousands of retirees participating in the Indiana Public Retirement System (INPRS).

State of play: The Indiana General Assembly has typically given benefit increases on an impromptu basis, generally during the biennial budget session. Benefits often don’t keep up with inflation.

  • They’re often supplemented in two ways: with a 13th check, as in 2019 and 2020, or using a cost-of-living adjustment (COLA), like in 2021.

By the numbers: The Indiana Public Retirement System has nearly 530,000 members from more than 13,000 public employers across the state. It manages more than $46.6 billion on their behalf.

What’s next: The strategies add to retiree income differently: the 13th check is an additional, one-time check on top of the year’s 12 other monthly payments, while the COLA is a percentage increase for all payments moving forward. Even so, lawmakers typically shy away from making expensive decisions in off-budget years, and any significant changes will likely happen in 2025 - the state’s next budget session. (Indiana Capital Chronicle)

DOE releasing simplified FAFSA application

Screenshot 2023-09-08 at 12.54.34 PM

What’s new: The Department of Education is simplifying Free Application for Federal Student Aid, or FAFSA, and those graduating seniors will be the first full class to use it -- though they'll have to wait a little longer to start filling it out. The new simplified FAFSA won't be available until December, later than the usual Oct. 1.

The details:

  • FAFSA won’t open until December, instead of the usual Oct 1.
  • Both students and parents must create a Student Aid Account to get an FSA ID before completing the form. An FSA ID is an account username and password combination.
  • Allow at least three days because in the new process, the Social Security Administration will require verification of FSA IDs before tax information can be accessed. Students and parents must log in to the FAFSA separately to complete each of their respective sections.
  • If parents are divorced or separated, the parent who provided the most financial support in the last calendar year will now complete the FAFSA.
  • The number of students a family has enrolled in college will no longer factor into the FAFSA calculation.
  • The net worth of family farms and small businesses will now be required as part of the application. (USA Today)

The small business boom

Screenshot 2023-08-15 at 9.52.10 AM

What’s new: Today, small businesses employ nearly half of the nation’s workers, according to a Chamber of Commerce report.

The details: The Chamber of Commerce report found that the Midwest was the most business-friendly region, thanks to the relatively low cost of living, well-educated workforce, and regulations lowering taxes and easing zoning restrictions for businesses.

The question: Are certain counties more friendly to small businesses than others?

  • To pinpoint the areas nationwide where small businesses abound, altLINE used Census Bureau data to find the county in each state with the highest concentration of small businesses in 2021, calculated as small establishments per 1,000 residents. Small establishments are defined as those with fewer than 500 employees. Counties with fewer than 1,000 residents were excluded from the analysis, as well as counties for which the Census Bureau didn’t have population estimates. Population data for Connecticut counties were sourced via the Federal Reserve.

Indiana’s winner: Dubois County

  • Total small business establishments: 1,287 (29.5 per 1,000 residents)
  • Share of establishments that are small: 99.4%
  • 2021 population: 43,625

Another important factor to consider: States where nonresidents are allowed to incorporate businesses will also have a higher ratio of small businesses to residents since not all small businesses are actually operated by people living in that state. (altLINE)

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Important Dates

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Tuesday, September 26th - Probate Code Study Commission @ 1pm

Tuesday, September 26th - Code Revision Commission @ 1pm CANCELLED

Thursday, September 28th - Government Reform Task Force @ 10am

Thursday, September 28th - Funding Indiana’s Roads For a Stronger, Safer Tomorrow @10am

Thursday, September 28th - Public Health, Behavioral Health, and Human Services, Interim Study Committee @ 12pm - *CANCELLED*

Thursday, September 28th - Child Services Interim Study Committee @ 1pm

Thursday, September 28th - Medicaid Oversight Committee

Friday. September 29th - State and Local Tax Review Task Force @ 10am

Friday, September 29th - Health Care Cost Oversight Committee @ 1:30pm

Monday, October 2nd - Land Use Task Force @ 9am

Monday, October 2nd - Commerce and Economic Development Interim Study Committee at 9am

Monday, October 2nd - Employment and Labor Interim Study Committee @ 1pm

Wednesday, October 4th - Code Revision Commission @ 11 am

Wednesday, October 11th - Drainage Task Force @ 12pm

Thursday, October 12th - Legislative Council, Audit and Financial Reporting Subcommittee @ 1pm

Wednesday, October 18th - Public Health, Behavioral Health, and Human Services Interim Study Committee @ 12pm

Wednesday, October 18th - Code Revision Commission @11am

Thursday, October 19th - Health Care Cost Oversight Committee @ 1:30pm

Friday, October 20th - Sate and Local Tax Review Task Force @ 10am

Monday, October 23rd - Legislative Council, Audit and Financial Reporting Subcommittee @ 1pm

Commerce and Economic Development Interim Study Committee @ 9am

Wednesday, October 25th - Corrections and Criminal Code Interim Study Committee @ 11am

Wednesday, October 25th - Drainage Task Force @ 2pm

Monday, November 13th - Health Care Cost Oversight Task Force @1:30 pm

Tuesday, November 14th - Land Use Task Force @ 9am

Tuesday, November 14th - State and Local Tax Review Task Force @ 10am

Tuesday, November 21st - Organization Day

Monday, January 8th - Anticipated 2024 legislative session start date

Interim Study Committee Calendar

Senate Session Calendar

House Session Calendar