Wednesday, August 16th, 2017

Leonard has a head and a pen for business

Posted: Wednesday, November 25, 2015

Article submitted by Vince Buchanan
Executive Director, Regional Chamber of Commerce

The most important legislation to pass through the Indiana General Assembly is sometimes the least flashy. Read on to learn why I know this is true, and why every Hoosier has reason to thank Rep. Dan Leonard, right, of Huntington.

Last month, Gov. Mike Pence authorized the state to pay off a significant federal loan, sparing Hoosier businesses more than $300 million in penalty payments due in 2016. That’s $300 million businesses can reinvest in their workforce, use to hire additional employees, accelerate training programs or update equipment. Certainly, the governor should be applauded for his decision.

However, were it not for six years of relentless determination by Leonard, Indiana would likely not have been able to keep those dollars here at home. What’s behind his huge savings? When wave after wave of layoffs from the 2008 fiscal crisis drained Indiana’s unemployment insurance trust fund, our state was forced to join 35 others and borrow nearly $2 billion from Uncle Sam to pay unemployment benefits.

In 2009, Rep. David Neizgodksi, D-South Bend, authored legislation to address the insolvent trust fund. Eventually, a compromise version of his bill passed in the Indiana Senate and, on a party-line vote, was passed in the House by the Democratic majority.

Under the bill’s provisions, businesses would have realized an increase in premiums of $400 million in 2010 and 2011. On top of that, they would have to shoulder an additional $200 million in principal and loan interest. The Indiana Manufacturers Association projected that the bill’s jump in unemployment taxes would prevent Indiana businesses from hiring 207,000 workers.

When the legislature reconvened in 2010, policymakers on both sides of the aisle realized these increases would devastate struggling Indiana businesses. In bipartisan fashion, the legislature approved Senate Bill 23, authored by Sen. Dennis Kruse, R-Auburn, which delayed the implementation of the compromise bill for one year.

The November 2010 election gave Republicans control of the Indiana House. Leaders asked Leonard to craft a better-balanced solution. Leonard’s work produced House Bill 1450, which was signed into law in May 2011. The bill reduced the looming premium increases, created predictable and fair benefits for unemployed Hoosiers and closed eligibility loopholes that had significantly drained the state’s resources. This put the state on track to pay off its loan (with interest) over the next 11 years. Leonard’s work was heralded by then Gov. Mitch Daniels, as well as business and industry leaders across the state.

As the Indiana economy rebounded from the Great Recession, Hoosiers went back to work and the demand for unemployment benefits declined. Indiana accelerated paying off its debt to the federal government. All the while, Leonard kept watch over Indiana’s employment trust fund. He authored several bills tweaking the HB 1450 framework to keep the fund moving toward solvency.

Finally, this year, Leonard championed language that allowed paying off the $250 million balance of the loan with funds borrowed from the state’s surplus. He recognized this would inject hundreds of millions of dollars into local economies and replenish the surplus within eight months. Leonard’s knowledge of both state and federal unemployment funding laws helped him lobby Indiana’s fiscal leaders, explaining the benefit of paying the debt years ahead of schedule.

The Indiana General Assembly approved the concept in April. The State Budget Committee recommended it in October, and less than a week later the governor announced Indiana would indeed pay off the loan balance prematurely.

Although credit should be given to many, no single person had a greater effect on restructuring Indiana’s unemployment insurance trust fund than Leonard. Over the past six years, he spent hundreds of hours studying the issue, learning from circumstances in other states, proposing solutions and educating fellow lawmakers. His leadership ultimately saved Indiana businesses hundreds of millions of dollars. Moreover, because his policies helped the economy rebound from the Great Recession, Hoosiers returned to work more quickly than in many other states.

It’s proof that electing policymakers willing to work doggedly to educate themselves is important. And, it reminds us that innovation fueled by cooperation can lead to positive change. This is a model for the attitude we should expect from elected officials at all levels. Leonard is a proven friend to Indiana’s workers and to Indiana businesses. He has led with distinction, and Indiana is a better place because of his tenacity and commitment.