Business fared well in 2005 legislative session

INDIANAPOLIS -- While schools and some special interests are grumbling over the 2005 legislative session, many in the business community are smiling over a long list of incentives and policies lawmakers passed in hopes of boosting commerce in Indiana.\nFrom statewide daylight--saving time to tax credits and exemptions to a new public--private board that is overhauling oversight of the state's job--creation efforts, business groups consider the session a success that will pay off in the coming months and years.\n"Overall for business it was outstanding," Kevin Brinegar, president of the Indiana Chamber of Commerce, said Thursday.\nThe Indiana chapter of the National Federation of Independent Businesses, which represents 16,000 small businesses, called it a positive session that included legislation to specifically help them. It included automatic abatements that phase in property taxes over three years for small--business investments and requiring state agencies to assess the impact their rules have on small businesses.\n"It sends a good message because we have felt left out of the economic development game," said Jason Shelley, the group's director.\nOther legislation would allow businesses that move headquarters to Indiana to have 50 percent of their moving costs reimbursed through tax credits, allow smaller businesses to receive economic development tax credits, increase the research and development tax credit from 10 percent to 15 percent in 2008, and exempt sales taxes on certain equipment used by motor sports ventures.\nThat business fared well was little surprise, since Republican Gov. Mitch Daniels made it a top legislative priority and had a GOP-controlled General Assembly to work with.\nDaniels said the jobs bills led his list of accomplishments.\n"It's the reason we sought public office in the first place, to bring more economic hope to the state," Daniels said.\nNot everyone was as impressed.\nThe two-year budget passed by Republicans is expected to erase the state's budget deficit, but many school districts will receive funding increases they say are far too little to cover costs, and some districts will see cuts. Some school groups and Democrats say there will be thousands of teacher layoffs across the state.\n"We all know that we need to do our best to bring jobs to this state," said Sen. Billie Breaux, D-Indianapolis. "However, we think education is the centerpiece to any economic development agenda, and I fail to understand how cutting school funding and eliminating as many as 5,700 teaching jobs across the state will help."\nEconomist Gary Baxter told lawmakers in mid-April that Indiana had regained about 79,000 of the 129,000 jobs it lost in recent years during the recession and prolonged economic downturn. He also said the state's economy was now growing at about the same pace as the nation's.\nBut House Ways and Means Chairman Jeff Espich, R-Uniondale, said many of the new jobs do not pay as much as those that were lost, and the state's economy is still suffering from too little innovation and entrepreneurship and too few high-tech jobs.\nHe said the pro-business legislation was significant and would help, but, "I still think we have a long-term problem and it will be a while before we do (see results)."\nBusiness groups did not get everything they wanted.\nBrinegar said changes in telecommunications laws the chamber sought failed. Many businesses also supported unsuccessful legislation that would have allowed insurers to offer basic health plans exempt from some costly mandated coverage to low-income residents and businesses with fewer than 75 employees.\nSome of the tax breaks will cost the state in lost revenue, at least initially. The credits and exemptions could cost between $14 million to nearly $31 million in the fiscal year that begins July 1, and as much as $33 million the next year, according to the Legislative Services Agency.\nProponents say the exemptions and credits should eventually pay for themselves by creating jobs and investments that will add to the state's tax base.