In The News Again: Obama, House Members Question BP Permits

Sewagemonster The issues of environmental regulation and permitting at the BP refinery in Whiting are back in the news again, this time with the celebrity backing of a presidential candidate:

Democratic presidential candidate Sen. Barack Obama and two of his Illinois colleagues are urging the U.S. Environmental Protection Agency to mount a "comprehensive" review of proposed air and construction permits for BP's Whiting refinery.

Obama and fellow Illinois Democrats Sen. Dick Durbin and Rep. Rahm Emanuel suggest that Indiana is rushing the permit process for the refinery, which BP plans to expand into a hub for processing heavy Canadian crude oil.

They raised their concerns in a letter sent Tuesday to the EPA's Chicago office which states that the Indiana Department of Environmental Management has "set an aggressive timeline to issue a final permit" for the refinery about 20 miles southeast of Chicago.

"While it is certainly possible to make determinations on the impact of significant plant modifications to regulated air quality standards and to do so in a compressed timeframe, a thorough EPA review of IDEM's decisions is clearly merited," their letter states.

The congressmen also said they had questions about whether the two draft permits that IDEM released earlier this month comply with Clean Air Act requirements.

One of BP's proposed permits details the construction changes the refinery would undergo as part of the $3.8 billion expansion. The other sets the proposed new pollution emission levels the expanded refinery would have to meet.

Cold Streak: Talk Of A Changing Economy Doesn't Exactly Pay The Bills

Helpwanted This is not a headline the Guv will use in a campaign ad: "GM buyouts further hammer state's eroding job base".

From the story:

GM's decision Tuesday to offer early retirements to thousands of hourly workers and replace them with lower-paid ones deals yet another blow to Indiana's blue-collar middle class, already clobbered by numerous layoffs.

It also underscores the continuing transition of Indiana's economy, which is watching its traditional manufacturing work force slip, replaced by jobs in technology, health care, service and other sectors. Some say the state is ill-prepared for that transition.

Tuesday, the Indiana Chamber of Commerce released a report that said nearly 24 percent of all working-age adults in Indiana lack either enough education or training to succeed in the work force.

From later on in the story:

To deal with the rapid changes in the state’s industrial landscape, the Indiana Department of Workforce Development and Indiana Economic Development Corp. offer training funds to new and growing companies statewide, but not all private-sector employers know how to access those dollars or whether they are eligible to receive them.

Probably because the IEDC spends more time talking about how awesome it is than it does actually reaching out to people in need. To hear the Guv tell it, there are no people in need. There are only jobs on the horizon that may or may not be here in a few years.

And don't you forget who brought you those jobs, kids.**

(**Under penalty of political retribution, the elected official responsible for job growth shall not be held liable for job loss, wage cuts or crappy benefits.)

Ironically, many of the major job announcements to which the Guv gleefully points as his success stories are in the manufacturing sector. His track record in other areas isn't very strong, especially if you factor out the Central Indiana market, which has its own set of drivers. Heck, the guy established a position three years ago specifically to focus on the motorsports industry. ROI thus far? Effectively zilch.

And he continues to completely ignore the average working Hoosiers who are barely getting by as we go through this "transition" phase.

Target Practice: State Coming Up A Few More Dollars Short Each Month

Thumbsdown1 Lesley Stedman Weidenbener notes in her weekly column for the Louisville Courier-Journal that the state's having some trouble meeting its revenue benchmarks, which could directly affect the Guv's tax plan:

In December, the revised forecast predicted that the state's revenues would be $230 million lower in the two-year budget cycle that ends June 30, 2009, than lawmakers had thought when they wrote the plan.

That's not much when viewed in light of the state's $26 billion, two-year budget. And the governor's budget officials and legislative fiscal leaders say it's manageable.

But since that forecast, the state's monthly tax receipts have not met projections. Already, revenue is $42 million below those estimates.

In and of itself, that wouldn't cause the state to go into the red during this budget cycle. Even with no changes in spending, the state would be able to pay all its bills without dipping into its savings accounts.

But in legislative circles, the revenue news is making more than a few folks jittery.

Probably the folks who understand that just because you say the economy is rosy doesn't make it so.

Trading Off: How Much Are You Willing To Pay For Property Tax Relief?

Abacus Do not buy into the Guv's tax plan talking points. There are costs associated with relief, and you will feel them, perhaps even more directly than you are currently feeling the property tax crisis. The Indianapolis Star reports:

Fewer police and firefighters. Fees for trash pickup. Fees to use a park's baseball diamond. Snow plowed less often. Higher income taxes.

Those are among the choices mayors across Indiana say they face if the property tax plan being debated by the legislature becomes law.

A proposal by Gov. Mitch Daniels that has been backed so far by the Senate and House would cap homeowners' bills at 1 percent of their home's assessed valuation, rental property at 2 percent and businesses at 3 percent.

It would mean more than $635 million less taken out of taxpayers' pockets in 2010 -- but that's also $635 million less for all local governmental units in the state, including schools, towns, cities and counties, based on the most recent estimates of the impact of House Bill 1001 by the nonpartisan Legislative Services Agency.

Overall, that figure is about 10 percent of the roughly $6.3 billion in annual property taxes collected statewide.

"This is just going to cripple a lot of communities," Richmond Mayor Sally Hutton said.

Her city would lose $1.95 million -- more than 11 percent of the city's property tax levy -- in 2010 under the plan as passed by the House.

And, she said, the lost revenues can't be made up by simply scrimping here or there.

"There's just nothing to give," she said. "We've all been under smaller budgeting for the last four or five years now."

Logansport Mayor Michael Fincher, whose city would lose more than $2.1 million in 2010 under the current plan, said he's considering such things as closing two of the city's three fire stations, charging for trash collection, eliminating school crossing guards and charging Little League and other groups that use the lights on ball diamonds.

He was among several mayors who questioned whether homeowners will, in the end, save anything at all if they end up paying higher local income taxes, which local governments might raise. There's also the higher state sales tax the plan calls for, along with potentially new local fees.

"If I save $200 (a year) on my property taxes and I now pay $20 a month for trash collection, 200 bucks costs me $240 (a year)," Fincher said. "It's not logical."

Vocal Locals: Realities Of Guv's Tax Plan May Sneak Up On Citizens

Taxman While the Guv continues to blame local governments for everything related to the property tax crisis, some folks are picking up on his strategy:

Long before last year's tax bills hit Marion County mailboxes and Indiana's property tax situation was elevated to the status of "crisis," local government officials across the state were calling on the General Assembly for more local control over tax revenues. Legislators balked, suggesting that city and county officials would use the expanded powers to raise taxes and increase spending.

Now, tax bills have increased even where spending has decreased. Lawmakers are finally offering some of the additional revenue sources that local officials wanted, but the sweeping tax proposals also include measures that threaten the ability of local government to staff police departments, to maintain roads and bridges and meet other day-to-day obligations of schools, cities, towns and counties.

Representatives of the Indiana Association of Cities and Towns and the Association of Indiana Counties are trying to draw attention to what they see as unintended consequences of House Bill 1001, Gov. Mitch Daniels' ambitious tax restructuring package. There's much to like in the legislation, according to Bluffton Mayor Ted Ellis, but also much to be worried about.

"To a person, we agree the system of property taxes is in need of change," Ellis said. "But to blame everything on local government and to assemble a patchwork of fixes is not the right approach."

Plenty of stories have been written about how much the Guv's plan is going to cost local government, but because it's easier to conceptualize tax cuts than a series of actions that will lead to tax increases or drastic cuts in local services, we're heading toward yet another temporary fix.

Of course, the Guv's probably thinking, "I'm so smart. I came up with this plan that will make me look like a hero in an election year."

Unfortunately, local governments will go through their annual budgeting process in the months right before the election, which means they'll have plenty of opportunity, assuming the Guv's plan passes, to place blame for local cuts squarely where it belongs.

High Costs? Roob Scraps His Plan To Privatize State Mental Hospitals

Fssa Behold, a sudden about-face by Family & Social Services Administration Secretary Mitch Roob on the issue of privatizing state mental hospitals:

The Family and Social Services Administration has dropped a plan to privatize three state hospitals, throwing new uncertainty into its future care for chronically mentally ill patients.

Less than five months after FSSA Secretary Mitch Roob told a state panel that a federal audit showed Indiana needed a new way of delivering care to chronically mentally ill patients, he has ended negotiations with a group vying to take over Richmond State Hospital.

Roob for the past 2 1/2 years maintained that the best way for the hospitals to remain open decades from now was for local nonprofits to take over their operations. However, in a Jan. 24 letter to the leader of the Richmond group, he said the state needed to revamp its system of care for mental patients.

"It must transform to a recovery model for the patients rather than an indefinite institutional placement," Roob wrote in the letter to Jan Passmore, president of Behavioral Health Services Inc. of Richmond.

The change in strategy was driven by a variety of reasons including cost concerns. Roob, in a telephone interview, said he decided to end the Richmond talks because Gov. Mitch Daniels asked state agencies in December to cut spending after a lower tax revenue forecast. Turning over the 300-patient Richmond State Hospital to a local group would cost the state $3 million to $5 million.

"We were not comfortable spending that money when times might get tough," Roob said.

Translation, please.

Let's Make A Deal: The Floor Is Open For A Debate About Incentives

Questionmark You should read Indianapolis Business Journal reporter Norm Heikens' blog. He takes up interesting issues and asks interesting questions. Like this one:

Gov. Mitch Daniels dished out $6.3 million in incentives as part of Defender Direct’s expansion announcement yesterday. But was the carrot a good deal for us taxpayers?

Defender Direct, which sells home security and satellite dish systems, plans to add 1,100 people, many of them at its Indianapolis headquarters and the rest elsewhere in the state.

The company promises the new jobs will pay an average of at least $18 an hour, not including benefits. Some of the jobs are for call centers, while others are higher-level positions.

A consultant in Cleveland who wrote Ohio’s economic development plan thinks the incentives, which amount to about $5,700 per job, are worth the price. “Those are very high wages, those are very good jobs,” says the consultant, Don Iannone.

Iannone reminds that in Ohio a low-income job is defined as paying $9.71 an hour or less. That makes up the bottom quarter of all jobs in Ohio. So $18 doesn’t sound bad to him.

What do you think? Was this incentive package priced right? Should the state have offered incentives at all?

See Ya Later: TRF Chief Wheeler Heading Back To The Private Sector

Goodbyewave Another high-ranking official in the Guv's administration is calling it quits. From the press release:

Governor Daniels has accepted the resignation of Cristy Wheeler as the executive director of the Indiana State Teachers' Retirement Fund (TRF).  Wheeler, who led the agency since 2005, is returning to the private sector.  Her final day is February 1. 

"Under Cristy's leadership, TRF provided our hard-working teachers, past
and present, with high-quality customer service and retirement
security," Daniels said. 

Daniels has appointed Steven Russo as TRF's new executive director.  For the past 19 years, Russo has worked for the technology company Thomson in Indiana and South America.  He was most recently the organization's general manager of north and south American operations - managing 2,000 employees and a half-billion dollar budget.  Prior to Thomson, Russo worked for seven years, in various engineering and finance positions, at the Naval Avionics Center in Indianapolis.

A Purdue University graduate, Russo lives in central Indiana with his wife, Polly, who is a first grade teacher at Mary Castle Elementary School.  He will begin his new duties at TRF on February 4.

On The Hill: Guv's Office Renews $264,000 Contract With D.C. Lobbyist

Moneybag_2 The Guv's Office has renewed a $22,000 per month contract with Washington lobbyist Deborah Hohlt.

Here's the 2008 contract: hohltcontract.pdf

If you'd like to know what Hohlt does to earn that cash, the appendix that's referenced but not included in the 2008 contract is attached to the 2007 version: hohltcontract2007.pdf

Anyone find it strange that for purposes of reporting her federal campaign contributions, which are many, Hohlt apparently identifies herself as a "homemaker"? This contract alone may make her the most well compensated homemaker in America.

Structural Support: IG Looks Into How Indiana State Museum Is Operated

Magnify The Inspector General releases a report today on the management structure of the Indiana State Museum.

You can read it here.