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 Policy Update, September 19, 2014
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Thank you for your interest and support. The Indiana Association of United Ways provides its Policy Update on "odd Fridays" (1st, 3rd and 5th Fridays). Contact us if you have any questions or comments about content (past, present or desired for the future).
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 Contact your senator to pass CCDBG Reauthorization 
This important bill is now in front of the Senate for re-authorization for the first time in twenty years. Please urge Sen. Donnelly and Sen. Coats to support S.1086, sharing how quality childcare benefits your community. And be sure to thank Rep. Todd Rokita for his role in helping negotiate the bill through the House Education and Workforce Committee and through the House.
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 Where will we shift the tax burden? Legislators try to understand the "big picture" of tax policy.  What is the right mix of taxes to support the government services we desire? Do you want to pay more property, income or sales taxes to enable business tax cuts? Do you want to pay more fees for services?
Legislators are currently debating the right mix of taxes needed to support a competitive business climate to grow Indiana's economy. The interim study committee on Business Personal Property Tax was charged to review a number of issues related to taxes borne by the business community. The analysis pointed to taxes "borne by business" even though the analysts verbally acknowledged that business taxes are actually passed on to other businesses, to labor through reduction in wages/benefits and/or to consumers. Below are a few of the themes from the first committee:
- Indiana offers a very competitive business climate when looking at taxation--especially in contrast to our neighboring states. Business supports 39% of total state and local taxes in Indiana compared with the 45% national average.
- Indiana's business taxes as a share of Gross State Product (GSP) are lower than all neighboring states. Only four states in the entire country have lower shares of GSP.
- In the few cases where we appear to be at a higher proportion tax on business than our neighbors, it is often because the total size of Indiana revenues is smaller. Indiana does not have as large of a state budget nor does Indiana pay for as many services as our neighbors. Sometime the national average number is skewed by states that do not have a specific type of tax at all.
- Tax incentives are used at the local, state and global levels to encourage re-location. There is a growing awareness that local infrastructure and quality of life, which are supported by taxes, are also important to relocation efforts.
Legislators shared a perspective that they cannot look at business taxes in a vacuum; rather, they see the need to look at it in context of all tax revenues and desired budget expenditures.Below are a few of the basic facts about Indiana's tax revenues.
- Sales taxes comprise 42.5% of state tax revenue. Indiana has the second highest sales tax rate (7%) in the U.S. Sales tax revenue is correlated to the economy.
- Personal Income taxes comprise the second largest source of state tax revenue at 31.1%.
- Property taxes (71.3%) and Local Option Income Taxes (20.4%) comprise the top local taxes. Property tax is a more stable source of revenue.
- The state has not fully realized the impact of recent repeal of the inheritance tax and reductions to the financial institutions tax and corporate income tax rates.
- Gaming and lottery tax revenues have declined in real dollars since 2011 and currently make up 5% of total state tax revenue.
My fellow tax policy wonks: All the presentation materials are posted online. Click on Sept. 15 to see the 11 documents filled with graphs, comparisons and detail.
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 Legislative Study Committees
If you missed a committee meeting, the new format on the General Assembly's website allows you to watch the recording of the committee meeting. Visit the specific interim committee's web page.
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Early Education Funding Statement  As policymakers debate methods for funding early education programs in Indiana, several private, philanthropic funders have raised concerns. While we may not all agree on the specific services or methods, many funders have reached agreement and signed on to an early education funding statement (attached) excerpted below.
We, the undersigned, endorse early education as critically needed services to advance Indiana's future. We endorse a form of public-private partnership in order to jumpstart and advance early education, but not where private, philanthropic dollars are required to sustain the efforts long-term. We assert:
1) Philanthropy has insufficient resources to address the need for funding high quality early childhood experiences statewide or long-term.
2) Philanthropy may provide short-term resources to demonstrate the payout to the State from a pilot project, as well as to model new and creative ways to help determine the feasibility and return on investment of alternative approaches.
If your organization would like to be added to the list of funders or community organizations on this statement, email us.
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 Last chance - Want HIP 2.0 approved? Please submit a comment.  T he plan for HIP 2.0 as submitted by Governor Pence to the federal government is open for public comment through Sunday, September 21, 2014. There were only 15 responses as of last week.
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Kids' Share 2014 shows that federal spending on children is small relative to other programs
 The Urban Institute issued the Kids'Share 2014 Report on Federal Expenditures on Children through 2013. The report looks at all federal expenditures, including both outlays in spending on programs and tax expenditures in terms of exemptions and credits. The report explores spending since 1960 and projects out through 2024, illustrating how spending on children will be far outpaced by spending on the elderly.
Key findings include:
- In 2013, the "kids' share" of the total federal budget was 10.2%.
- Nearly two thirds (61%) of the combined federal, state and local spending for children goes towards education. Most local and state resources (62%) are spent on education. The majority of federal dollars spent on children is on healthcare.
- The federal government spent about $6 on the elderly for every $1 spent on children in 2011.
- Spending on children since the Budget Control Act of 2011 (sequestration) has reduced spending on children by 5%.
Tax policy is a primary method for how children benefit from the federal expenditures. Most families with children--regardless of income--claim a "dependent exemption" and "child tax credit" when filing their household tax return. Lower wage earners with children may also claim the Earned Income Tax Credit (EITC). Expenditures on children include Medicaid, SNAP, subsidies for employer-sponsored insurance, social security, child nutrition, education and TANF (which includes some child care subsidies). The graph below illustrates the makeup.
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 Voter Registration Day on Tuesday, Sept. 23
Are you registered to vote? National Voter Registration Day is September 23. Place a poster in your business or organization encouraging people to register to vote. Ask three people if they are registered. If they say no, direct them to IndianaVoters.com. Deadline is October 6 in order to vote in the November 4 elections.
Nonprofit organizations, businesses and schools may download a partner toolkit from the organizers of National Voter Registration Day. Materials are available in multiple languages and formats, depending upon your target audience (young people, minorities, elderly). Materials are also available that explain how to conduct a voter registration event.
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IaUW Public Policy
IaUW is a nonpartisan organization that works to advance policy principles and compromise solutions for the common good. We focus on programs and policies that help:
- children prepare for and succeed in school;
- individuals achieve and sustain financial stability;
- individuals access quality healthcare; and
- communities thrive, including a strong 2-1-1 network and charitable sector.
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Frequently Requested Links / Documents
iauw.org - Learn about the Indiana Association of United Ways, current trainings and conferences and the ways we support local United Ways/Funds, partners and communities.
IaUW Policy / Advocacy info - Review and download IaUW Policy Priorities, Third House calendar, bill lists, fact sheets, talking points and testimony.
Advocacy Action Center - Contact your member of Congress or State Legislator, provided through our partnership with United Way Worldwide.
IaUW Policy Update Archive - Read prior issues, special articles and key documents produced by IaUW related to public policy and advocacy.
NEW - Community Report Card - Check out key indicators in Education, Income and Health for your neighborhood, county or region. IN211.org - S earch for human service information available through the referral database or by calling 2-1-1. Download reports about resources, needs, gaps and trends from Indiana 211 Partnership.
NRN Calendar - Register for high-quality and affordable training for nonprofit staff and volunteers by the Indiana Nonprofit Resource Network.
Indiana General Assembly
- Check the hearing or floor schedule, watch a live or recorded hearing or floor session and look up your legislators.
Library of Congress
- Look up bills introduced in Congress. Note that the THOMAS site will be maintained through 2014 and fully replaced by Congress.gov.
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The Legislative Council has appointed the 
