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Local, state, and federal highlights in this week's memo include:
- Indiana Sees Gas Tax Increase
- Indiana’s Labor Market Gap
- Pandemic Medicaid Coverage May Come to an End
- Indiana Lawsuit Challenges Ballot Access Law
- Indiana Looming Problem: Workforce vs. Education
- National Surpluses May Take Hit in 2023
- Who’s Paying for Higher Health Care Premiums?
- Fed’s Anticipate Another, Smaller, Rate Hike
- U.S. Adds 261k Jobs in October
- Important Dates
Indiana Sees Gas Tax Increase
What’s new: Last Tuesday Indiana’s gas tax increased to 23.1 cents per gallon - up one cent from last month and five cents from this time last year.
Hoosiers pay four taxes on gas:
- State sales tax (23.1 cents/gallon)
- State excise tax (33 cents/gallon)
- Federal excise tax (18.3 cents/gallon)
- A second federal tax funding hazardous waste clean-ups (0.1 cents/gallon).
That adds up to 74.5 cents of tax on every gallon of gas.
Yes, but: It is a decrease from a peak sales tax rate in August of 29.4 cents per gallon. There is still a chance it could go up in the next tracking period. (Indiana Capital Chronicle)
Indiana’s Labor Market Gap
What’s new: According to a new analysis of labor market trends in central Indiana, the gap between the number of high-skilled jobs and trained workers to fill those positions widened during the COVID-19 pandemic.
Why it matters: The findings are the latest to indicate that Indiana employers are struggling to fill jobs due to a talent shortage. The report found that the pandemic rapidly accelerated the demand for college-educated workers while simultaneously reducing the need for unskilled labor. Factors such as globalization, automation and digitization were cited as reasons for the decline in demand for non-degreed talent in the Indianapolis metropolitan area.
- The talent gap is most pronounced in Black and Hispanic populations, where students are less likely to complete high school and pursue postsecondary education.
- The report also mirrors national data showing that women have not reentered the labor market at the same rate as men since the pandemic, in part due to changes to childcare.
Zoom out:
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A recent Indiana Chamber of Commerce survey found that three-fourths of Hoosier companies were forced to leave positions open due to a lack of qualified applicants
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A June report from the Indiana Commission for Higher Education showed postsecondary enrollment plunged from 65% in 2015 to 53% in 2020.
What they’re saying: “There has been a substantial shift in the projected number of jobs that will be available to individuals with only a high school diploma, and that has really meaningful long-term implications for public health and public safety given that we have a high concentration of individuals with that level of educational attainment in our city,” said Jason Kloth, president and CEO of Ascend Indiana.
What’s next: The report’s authors recommend that employers become more involved in the education system, beginning in middle and high school, to train the employees of the future. It also calls for a comprehensive study and evaluation of certificate programs and for training providers to better measure the impact of those programs. (IBJ)
Pandemic Medicaid Coverage May Come to an End
What’s new: Hundreds of thousands of Hoosiers may be without state-provided insurance as the federal government prepares to “unwind” Medicaid coverage that allowed recipients to keep their Medicaid coverage throughout the COVID-19 pandemic.
The details: Typically, recipients are up for renewal annually but the federal government waived that requirement in 2020 during the COVID-19 pandemic. States were directed not to kick anyone off of a government insurance program like Medicaid and the federal government spent additional money to cover the costs of having more people in the program.
Yes, but: President Joe Biden has indicated that the October renewal could be the nation’s last, meaning that continuous Medicaid coverage could end in January.
Zoom out: The Family and Social Services Administration, which oversees the program, declined to answer specific questions about Indiana’s approach to redetermining coverage for Hoosiers, instead referring to the agency’s post on the topic.
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The federal government has given states a year to review their enrollees to determine their eligibility, some state legislatures, such as Arkansas’, have shortened that period to six months.
- Officials with FSSA did clarify that the state will take a full year to review, assessing beneficiaries on a rolling basis during the same month when they first began receiving services.
The bigger picture:
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According to the September monthly Medicaid enrollment reports, about 2.1 million Hoosiers are currently enrolled. Before the pandemic that was around 1.4 million. The agency believes that 75% of Hoosiers will remain enrolled.
- According to the December 2021 Medicaid forecast, expenditures for the Healthy Indiana Plan (HIP) increased by 12.9% between the 2019 fiscal year and the 2020 fiscal year. But between 2020 and 2021, costs ballooned from $4.4 billion to over $6 billion, a 39% increase.
- A large portion of state Medicaid costs have been borne by Indiana’s healthcare entities, primarily through the Hospital Assessment Fee (HAF).
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The Indiana Hospital Association reported that hospitals will pay roughly $467 million in 2022, which combined with $102 million in tobacco taxes funds the entire HIP program. (Indiana Capital Chronicle)
Indiana Lawsuit Challenges Ballot Access Law
What’s new: A lawsuit that challenges Indiana’s ballot access law will move forward after a federal judge ruled that the lawsuit brought by the Indiana Green and Libertarian parties requires a “fact-intensive” review.
The details: The lawsuit alleges that minor parties and independents face “severe and unequal burdens” because of the state’s “unconstitutional” rules dictating how they can qualify for Indiana’s general election ballot.
Why it matters:
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Indiana’s current law stipulates that any political party which earns 10% of the vote in the last election for secretary of state can nominate their candidates for federal, state, legislative and local offices in the primary election.
- To be guaranteed general election ballot placement in the secretary of state’s race, the party must earn 2% of the total vote cast at the last election for secretary of state in the election district that the candidate seeks to represent.
Without that vote count, minor parties must start from scratch and collect thousands of signatures to participate in the next race.
- The number of necessary signatures — which is roughly 45,000 for 2022 — is equal to that same 2% margin.
What they’re saying: “Indiana’s nomination petition procedure itself is obsolete and inadequate to the task,” the lawsuit says. “Collecting signatures by hand is inherently time-consuming, labor-intensive and expensive. The large number of signatures that Indiana now requires Minor Parties and statewide Independents to collect therefore requires a massive expenditure of funds and resources.”
The big picture: The Indianapolis judge, James R. Sweeny II, on Thursday rejected a request from Indiana Attorney General Todd Rokita to dismiss the suit, but said in his ruling that the plaintiffs’ constitutional challenge needs further analysis: “It is far too early for the court to say that no relief is possible on the facts as alleged.” (Indiana Capital Chronicle)
Indiana Looming Problem: Workforce vs. Education
What’s new: According to a new report from Ascend Indiana and Employ Indy, Indiana's employers and workforce are becoming increasingly mismatched, setting the stage for more income inequality, racial disparity and social problems across the state.
Why it matters: “Hiring managers are looking for college-educated applicants, especially as jobs that typically don't require higher education give way to automation, while remote and digital jobs continue to increase,” said Marie MacIntosh, the president and CEO of Employ Indy. “Meanwhile, fewer Hoosiers are pursuing education past high school, likely due to students who don't see the value and the prohibitive costs.”
The details:
- For jobs that typically don't require degrees, Indiana managers posted some 126,000 jobs in one month in 2022, compared to the 155,000 people hired into those jobs.
- On the other hand, managers posted some 119,000 jobs that typically require degrees and only hired 39,000.
The big picture: “These problems were brewing before the pandemic, but the mass quarantine prompted employers to automate even more jobs and expand remote work,” MacIntosh said. “To fix this problem, Indiana needs to convince its’ students that college is worth the cost,” she said. “Employers, on the other hand, need to engage with students early so they can build skills and experience.” (IndyStar)
National Surpluses May Take Hit in 2023
According to 2022 data analyzed by Pew Charitable Trusts, Indiana’s surplus might seem massive but the state could operate only 33 days using nothing but rainy day funds — lower than the national median of 42.5 days.
Why it matters: While Indiana is known for having maintained during the pandemic due to their significant surplus, some experts believe that fortunes will change in 2023.
What they’re saying: “Higher-than-forecasted tax revenue growth, historic federal aid and record financial reserves have buttressed states’ fiscal positions over the past two budget years,” Pew’s report said. “However, policymakers now face an inflection point as they reckon with several looming challenges, including weakening economic growth amid tightening monetary policy and historically high inflation and a tapering of federal aid.”
What’s next: Capital and operating costs for state agencies are up across the board. On top of that, issues like workforce attraction, affordable housing, and increasing healthcare and energy costs have been a focal point for the state during the interim months. The Indiana General Assembly will reconvene in January for the 2023 budget session where they be tasked with addressing all of these issues. (Indiana Capital Chronicle)
Who’s Paying for Higher Health Care Premiums?
We’ve reported over the last several weeks that health care costs for 2023 are expected to see a significant increase - and health care industry groups are about to brawl over who pays the price.
Four changes unfolding now:
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Even insured Americans are struggling to afford care — the result of years of cost-shifting by employers and insurers onto patients through higher premiums, deductibles and other out-of-pocket costs.
- Employers are struggling to attract and retain workers. Forcing their employees to shoulder even more costs seems like a less viable option.
- Tougher economic times make patients more cost-sensitive.
- Rising medical debt, increased price transparency and questionable debt collection practices have rubbed some of the good-guy sheen off of hospitals and providers.
The bottom line: All of this is coming to a boil. (Axios)
Fed’s Anticipate Another, Smaller, Rate Hike
What’s new: Last week, the Fed’s held a meeting that highlighted the widely expected 0.75 percentage point interest rate increase.
- The central bank is soon going to slow down the speed at which it raises interest rates, but sees the level the rates will reach as higher than a couple of months ago.
Why it matters: It matters more for stock and bond prices where rates end up than which month they get there.
The bottom line: The next rate hike in December might be 0.5 percentage points instead of 0.75 points. But higher borrowing costs are here to stay. (Axios)
U.S. Adds 261k Jobs in October
What’s new: the U.S. economy added 261,000 jobs in October, while the unemployment rate rose to 3.7% from 3.5%, the government said on Friday.
Why it matters: The last major economic report before the midterm elections shows that while jobs growth has slowed, employers continue to add workers at a robust pace as the labor market defies fears of a recession.
Driving the news: October's jobs gains were above the 205,000 payrolls economists expected. It's a slightly slower pace than the 315,000 jobs added in September, which was revised higher by 52,000.
- Average hourly earnings, a proxy for wage growth, rose by 0.4% in October — a bit faster than the prior month, when wages grew 0.3%.
- The share of people working or looking for work, known as the labor force participation rate, was 62.2%, a tick below the 62.3% in September.
Yes, but: This may cause concern for the feds, which fears the too-hot labor market will stoke inflation. But, on the flip side, it's been great for American workers — though the booming job market has been coupled with decades-high inflation that's eaten away at wage gains. (Axios)
Important Dates
- Thursday, November 10th at 10am - Prosecutorial Oversight Task Force
- Monday, November 21st at 10am - Drainage Task Force
- Tuesday, November 22nd at 1:30pm - Organization Day
- Friday, December 9th - LSA bill request deadline
- Monday, January 9th - 2023 Legislative Session Reconvenes
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