INDIANAPOLIS –Senate Democrats released a package of proposals today aimed at spurring business activity and creating new jobs in Indiana. Focused on fostering entrepreneurial ventures and leveraging small business investments, members of the Senate Democratic Caucus believe the proposals would improve Indiana’s job market and generate income to support families and communities.
A recent report from the U.S. Bureau of Economic Analysis indicated that Indiana is ranked 45th among the states in personal income growth.
In fact, Hoosiers have experienced a negative average quarterly growth rate over the past two years when adjusted for inflation, with earnings falling 3.5 percent.
The package calls for a redirection of resources from ineffective programs to those that better serve Indiana’s employers and workers. The proposals require no new state funding or new taxes.
Included in the “Real Ideas, Real Jobs” proposal announced today:
Fast-track for small business: To help Indiana entrepreneurs and small businesses, the caucus wants to create a “Small Business Concierge Team” to provide one-stop service for Indiana start-ups and businesses looking to expand. The team of specialists from various state agencies would be dedicated to assisting small businesses by fast-tracking applications for state licensing and regulatory approval, as well as helping to identify capital and other growth resources. Critical to this service is that the state help entrepreneurs become “capital-ready” by connecting them with regional networks, universities, Certified Technology Parks, and small business incubators that offer management training and low-cost facilities.
Improve access to capital: Indiana scores poorly in small businesses’ ability to access capital, a critical factor for a state’s economic performance. Recent reports on Indiana’s ability to provide an attractive business environment indicate not only that the state ranks in the bottom half of states on access to capital, but that the state has lost ground over the past decade.
The plan calls for a revision of the defunct Capital Access Fund to provide low-interest loans to Indiana businesses. Funded through dollars redirected from failing economic incentives, the program would operate as a revolving loan fund for start up and expansion costs. Management of the program would be moved from the Indiana Economic Development Corporation (IEDC), where it has languished, to the Indiana Finance Authority which manages other state revolving funds.
New hire tax credit: Providing Indiana’s small businesses the same benefit now available to larger companies, this plan would increase access to a new hiring incentive created earlier this year. The program approved under Senate Enrolled Act 23 provides a tax credit for 10 percent of the wages paid to qualified new hires during a two-year period, lowering an employer’s labor costs for those new employees. The Senate Democrats’ plan removes an existing requirement that a business hire at least 10 new employees to qualify for the tax credit, opening the program to small employers. Other eligibility requirements would be maintained.
Review and reinvest state dollars – beginning with job creation incentives: Senate Democrats want to re-establish the legislative Sunset Evaluation Committee to annually review state programs and suggest potential cuts from ineffective programs, beginning with a focus on identifying IEDC job incentives that have not produced jobs and reinvesting in those that are successful. This committee would ensure that our limited state dollars are directed at the most effective programs benefiting job creation and income generation.
Preference in state contracts to companies that use Indiana labor and Indiana materials: Taxpayer money spent on state contracts should help put Hoosiers to work, not profit out-of-state companies. By requiring state contracts to contain a guarantee that at least 80 percent of the people working on those contracts will be Indiana residents, we can make the most of state projects by reinvesting in Indiana businesses and workers. The requirement would also be applied to professional services contracts that are not competitively bid, such as consultants hired by state agencies.
Additionally, the proposal would mandate that any state contract bid selection process give preference to a company when the principal office is located within the state. Current administrative practice allows the director of a project to take into account the distance to the principal office from the job site, but does not require that the office be located in Indiana.
Release state infrastructure project funds: Finally, Senate Democrats restated their call for the state to immediately begin work on planned construction projects, state universities capital projects, roads and highways and other state infrastructure investments. Many projects have already been authorized by the General Assembly under the state budget signed into law by Governor Daniels in 2009, but have not been put out for bids.
In September Senate Democrats pushed the State Budget Agency to release bonding authority for five university projects that would create as many as 3,000 jobs. Those jobs would have translated into as much as $100 million in personal earnings by Hoosier workers, benefiting local economies. The Democrats emphasized that the projects would not require the state to incur immediate costs, as they will be funded through bond issuances. They also pointed out that bond interest rates are at a historic low, making it less expensive to borrow money.
Learn more about Senate Democrats’ economic development priorities at senatedemocrats.in.gov>>