9/16 Torchbearer Weekly Policy Update
Thank you for letting us be your trusted source for local, state, and federal policy updates.
Let’s dig in…
- United States Supply Chain Prices Unexpectedly Fell in August
- Chronic Absenteeism Continues to Improve in Indiana Schools, New State Data Shows
- I-69 Bridge Project Advances
- Work-Based Learning Guide Released
- What Could Come After Interest Rate Cuts This Week
- State Revenues Continue to Beat Estimates
- Share the Torchbearer Newsletter with Your Network!
- Important Dates
United States Supply Chain Prices Unexpectedly Fell in August
The Labor Department reported a 0.1% drop in U.S. producer prices last month, a surprising decline from July.
Why it matters: This decline in wholesale inflation suggests that tariffs on imports might not be raising prices as anticipated.
- Retailers and wholesalers are absorbing these costs, possibly due to discounts from foreign suppliers striving to maintain market share.
The big picture: Compared to a year earlier, producer prices rose by 2.6%, while core producer prices—excluding food and energy—also fell 0.1% from July, marking a 2.8% increase year-over-year.
What’s next: The Federal Reserve may cut interest rates next week for the first time this year as a reaction to these inflation figures.
- President Trump has been vocal about the need for rate cuts, criticizing Fed Chair Powell's hesitance. (IBJ)
Chronic Absenteeism Continues to Improve in Indiana Schools, New State Data Shows
Fewer Hoosier students are missing large chunks of school, but chronic absenteeism rates still remain above pre-pandemic levels.
Why it matters: Regular attendance is crucial for mastering foundational skills and preparing for future educational steps.
- Chronic absenteeism affects students' academic performance, with notable differences in literacy and numeracy skills.
- Addressing absenteeism can lead to improved educational outcomes across all demographics.
The big picture: Indiana's chronic absenteeism rate dropped to 16.7% for the 2024-25 school year, marking the third consecutive year of improvement.
- The rate is down from 21% in 2022, showing positive progress.
- However, high school students, especially seniors, continue to have higher absenteeism rates.
What's next: New attendance laws aim to standardize reporting and interventions, with continued focus on improving student attendance.
- Local prosecutors can now hold intervention meetings with parents to address habitual truancy issues.
- Ongoing efforts are needed to address the academic consequences of chronic absenteeism. (Indiana Capital Chronicle)
I-69 Bridge Project Advances
Senator Todd Young and U.S. DOT Secretary Sean Duffy visited southwest Indiana to discuss progress on the I-69 Ohio River Crossing bridge project.
Why it matters: The bridge will enhance connectivity between Indiana and Kentucky, unlocking significant economic benefits for southwest Indiana.
- This project is filling a crucial gap in the nation’s transportation network.
- It is expected to open new opportunities for economic growth in the region.
Driving the news: During the visit, officials received briefings on the project's progress and participated in an aerial tour of the construction sites.
- Senator Young emphasized the importance of the project, highlighting years of efforts to secure federal funding.
- Secretary Duffy's visit follows his pledge during the confirmation process to support this key initiative.
What’s next: Continued collaboration between Indiana, Kentucky, and the U.S. Department of Transportation is crucial for the project's success.
- Local and federal stakeholders are committed to pushing the project forward efficiently.
- The completion of I-69 will serve as a major boost for regional infrastructure development. (Todd Young’s Office)
Work-Based Learning Guide Released
The Indiana Department of Education and Commission for Higher Education have released the Work-Based Learning Menu of Experiences.
Why it matters: It supports the new high school diploma by clarifying WBL options and aligning them with Honors Seals.
- Identifies high school courses facilitating WBL participation.
What’s next: Schools will integrate this guide to enhance students' real-world experiences.
- Questions may be directed to CTE@che.in.gov (Institute for Quality Education)
What Could Come After Interest Rate Cuts This Week
After nine months of standing pat, the Federal Reserve is set to offer some interest rate relief on Wednesday. The open question is what hints are on offer about what comes next.
The big picture: Rapidly deteriorating job growth has solidified support for a quarter-point interest rate adjustment among Fed officials.
- But with price pressures still elevated, some will be reluctant to indicate much more monetary easing from here.
- New quarterly projections out Wednesday will shed light on the range of opinion and how much consensus there is behind additional rate cuts this year.
Flashback: In the last round of projections, issued in June, the median official anticipated two rate cuts in the second half of the year, but there was a wide range of opinion — including seven officials out of 19 who didn't think any rate cuts would be justified.
- Since then, inflation has proceeded broadly as expected. But job creation has taken a major step down, clearing the way for more consensus among policymakers that it's time to make monetary policy less restrictive.
Yes, but: The new projections will show the balance of opinion on the Federal Open Market Committee between those who see one or two tactical rate cuts as justified and those who believe a more protracted easing cycle is warranted to deliver a jolt of monetary stimulus.
- It is also a distinct possibility that nominee Stephen Miran (if confirmed in time) will dissent in favor of a supersized rate cut, and that one or both of President Trump's appointees on the board (that would be Michelle Bowman and Christopher Waller) would join him.
- Hawkish dissents — favoring leaving rates unchanged — look less likely but can't be ruled out by the likes of Kansas City Fed president Jeffrey Schmid or his St. Louis counterpart Alberto Musalem.
What they're saying: "The vote to ease policy is unlikely to be unanimous," wrote Samuel Tombs, chief U.S. economist at Pantheon Macroeconomics, in a note. "A divided Committee means the policy statement will remain terse, giving little away about the timing and extent of further easing."
- "That usually would elevate the importance of [Fed chair Jerome] Powell's tone in the press conference, but with the end of his term as Chair in May coming into view and other FOMC members disagreeing with him more publicly, markets may be less responsive than usual to his comments," wrote Tombs.
Of note: A lot has gone down since the last Fed policy meeting on July 30.
- Two days later, new jobs numbers showed the steep step-down in job growth, Trump fired the BLS commissioner, and governor Adriana Kugler announced she was stepping down — the slot Miran is set to take.
- The clash over governor Lisa Cook's mortgages started days later.
- Powell will seek to project calm in responding to questions about those developments. As in the past, he is likely to emphasize the Fed's focus on making sound decisions based on rigorous data, independently of politics. (Axios)
State Revenues Continue to Beat Estimates
Indiana's revenue exceeds expectations by 4%: Indiana's General Fund revenues in August reached just under $1.6 billion, surpassing forecasts by $60.4 million.
Why it matters: These numbers highlight Indiana's economic resilience and robust fiscal growth.
- Increased collections from sales and income taxes, along with interest revenues, were significant contributors.
- Cigarette tax collections also exceeded expectations, totaling $50 million.
By the numbers: Compared to August 2024, last month's collections were $137 million higher.
- Year-to-date, revenues have reached nearly $3.2 billion, exceeding projections by $78.1 million and marking a 7.4% increase from the previous fiscal year.
The bottom line: While sales and cigarette taxes rose, corporate tax collections and riverboat wagering fell short of expectations.
The full August report can be viewed here. (Inside Indiana Business)
Share the Torchbearer Newsletter with Your Network!
Not signed up for our weekly newsletter? Sign up today!
Important Dates:
State Budget Committee: Wednesday, September 17th at 9:30 am
Interim Study Committee on Roads and Transportation: Monday, September 22nd at 10:00 am
Interim Study Committee on Child Services: Tuesday, September 23rd at 9:30am
Interim Study Committee on Courts and the Judiciary: Tuesday, September 23rd at 1:00 pm
Interim Study Committee on Pension Management Oversight: Wednesday, September 24th at 9:00 am
Interim Study Committee on Energy, Utilities, and Telecommunications: Wednesday, September 24th at 1:30 pm
Interim Study Committee on Corrections and Criminal Code: Thursday, September 25th at 10:30 am
Interim Study Committee on Public Health, Behavioral Health, & Human Services: Thursday, September 25th at 1:00 pm
Interim Study Committee on Agriculture: Thursday, October 2nd at 1:00 pm
Interim Study Committee on Environmental Affairs: Wednesday, October 8th at 11:00 am
Interim Study Committee on Fiscal Policy: Friday, October 10th at 1:00 pm
State Board of Education Meeting: Wednesday, October 15th at 9:00 am
Interim Study Committee on Public Health, Behavioral Health, & Human Services: Wednesday, October 15th at 1:00 pm
Organization Day: Tuesday, November 18th