Lt. Governor (Tourism, OCRA, Energy, ISDA)
- Agency Overview
- Perfomance Measures
- Operating Budget Request
- ISDA Agency Overview
- ISDA Operating Budget Request
IHCDA (Mortgage Foreclosure Counseling)
Personal Services Contingency Fund, SEA 501 Plan Update (SBA)
State Capital Projects and Leases (SBA/IFA)
Indiana Economic Development Corporation (IEDC) – The IEDC supports job creation and economic development by offering programs and initiatives, tax credits, and exemptions to businesses that are investing in Indiana.
According to IEDC’s report, between July 1, 2009, and June 30, 2010, the agency closed 192 competitive economic development projects. The companies undertaking these projects have committed to invest $1.18 billion in Indiana and create 26,371 new jobs. For calendar year 2010, the IEDC has closed 135 projects year to date. These projects collectively represent commitments to create 17,850 jobs and invest $2.8 billion of private capital in Indiana.
IEDC requested $84.3 million for the FY 2012 and FY 2013 biennium. The budget includes $74 million in general fund requests and $10.3 million in dedicated and federal funds. Approximately $6.6 million per year will be used for administrative expenses, and approximately $35.55 million per year or will be used directly for economic development incentive programs.
See the entire IEDC presentation for more details from their presentation.
Lt. Governor’s Office (Tourism, OCRA, Energy, ISDA) – The Lieutenant Governor presides over the Indiana Senate, serves as the Secretary of Agriculture and Rural Development, and directly oversees the following agencies:
Indiana Office of Tourism Development (IOTD) – IOTD markets the state’s tourism destinations and creates marketing opportunities for statewide tourism partners to drive the economic impact of visitors. In efforts to reduce operating costs IOTD has eliminated funding support for staffing of ten statewide welcome centers, an annual Indiana Festival Guide and suspended all radio and television advertising. They also plan to reduce the quantity of Indiana Travel Guides published.
Indiana Office of Energy Development (OED) – The OED has two main functions: (1) Developing Indiana’s energy policy and continuing to achieve goals set out in the Hoosier Homegrown Energy strategic plan and (2) Administering federal dollars from the US Dept. of Energy for grant programs that promote renewable energy and energy conservation projects.
OED’s accomplishments include being named #1 in wind development in 2008 and #2 in 2009 (according to the American Wind Energy Association), though OED also reported that Indiana lags behind other states in terms of it’s net metering policy.
To reduce operating costs, OED discontinued the Education and Outreach position from their staff, reduced their communications budget, and eliminated the Alternative Power and Energy (APE) program that had been offered for the past four years.
Indiana Office of Community and Rural Affairs (OCRA) – The Office of Community and Rural Affairs (OCRA) contributes to the economic well-being of the state by working with Indiana’s smaller cities and towns to achieve their own visions for economic development.
OCRA-administered programs such as the Community Development Block Grants and the Indiana Main Street program contribute to the economic viability of rural areas by attempting to strengthen local capacities to create Hoosier communities that are competitive for top economic development projects.
To reduce operating costs, OCRA has dissolved the Rural Capacity Grant program, which funded entrepreneurship and workforce development projects. OCRA also reduced the Downtown Enhancement grant award program. OCRA stated that they reduced and eliminated these programs because the agency has shifted its focus to more current programs which emphasize regional development and partnerships.
Indiana State Department of Agriculture – According to ISDA officials, “unprecedented global demand for agricultural products combined with agriculture’s expanding role in meeting energy demands has resulted in record investment and job creation in Indiana’s agricultural sector and record farm income.” They testified that Indiana’s agriculture industry is well positioned to lead other sectors during the recovery of the global recession.
According to the agency’s testimony, with the help of ISDA, IEDC and a favorable business environment, the agriculture, food and life science sectors have seen over 6,500 new jobs and over $5 billion of investment since 2005. The USDA reported that Indiana saw a 47% increase in farmers markets in 2009, and ISDA has played a critical role in this expansion and has a number of initiatives to assist these diversified operators.
ISDA does not currently plan to reduce or eliminate any programming, but they reported having taken aggressive cost cutting actions including moving offices, consolidating operational staffing positions, leaving vacant positions and retirements unfilled, reducing their vehicle fleet and restricting travel.
Indiana Housing & Community Development Authority (IHCDA) – IHCDA’s presentation focused on the administration of two of their largest programs: Indiana’s Individual Developmental Account (IDA) program and the Indiana Foreclosure Prevention Network (IFPN) program.
The State of Indiana’s IDA program offers special savings accounts that match the deposits of low- and moderate-income people. For every dollar saved in an IDA, savers receive a corresponding match and can use the savings for post-secondary education, job training, a home purchase, or to capitalize a small business.
In the past, IHCDA received funds from the state’s General fund to administer Indiana’s IDA Program. In the last two years, IHCDA has opted to not draw down General Fund appropriations and used internal IHCDA funds. Indiana also has received federal dollars for the program. Though not guaranteed, Indiana has historically been and continues to be successful in receiving an annual $1 million award allocation through the Assets for Independence Act. To date, Indiana has been allocated more federal funds for purposes of our IDA Program than any other program grantee.
The Indiana Foreclosure Prevention Network is a program that is intended to assist homeowners at risk of foreclosure work with their lenders to find solutions in lieu of foreclosure. This is important, as each foreclosure in Indiana conservatively costs stakeholders (local government, lenders, neighboring property owners, etc.) over $40,000. Estimates suggest that the institution of IFPN supported settlement conferences has saved Indiana over $66 million to date.
Funding for the IFPN comes primarily from three sources. The first, and to date largest, source is federal funds through the National Foreclosure Mitigation Counseling (NFMC) program. This pays for direct counseling services and some minimal oversight administrative functions. In IFPN’s January 2010 award, they received $1.5 million from NFMC. The second primary source is from the mortgage foreclosure recording fee – with this, lenders must pay $50 to the county clerk every time that they file a foreclosure suit in Indiana. To date, we have realized just over $600,000 from this funding source. The third primary source is from philanthropic and lender donations, the bulk of which are used for marketing and outreach activities. Read an earlier post about IFPN events>>
Public Employees Retirement Fund/Teachers Retirement Fund (PERF & TRF) – In the financial world, the “ARC” or annual required contributions is defined as the amount that an employer is required to contribute to the pension fund in order to ensure that the retirement plans that have been promised can be paid in full when they come due. According to the PERF and TRF presentation, Indiana has been paying its “ARC” since the beginning and is currently one of the healthier pension plans in the nation. In fiscal year 2009, only 56% of states paid the full ARC to their pension plans. Indiana has paid close to 100% of their ARC in each of the last four years. However, legislators were also warned that Indiana’s ability to pay their required contribution rates will continue to become more difficult over the next three to five years. Although Indiana is not legally allowed to change retirement policies that have already been promised, legislators discussed options for changing Indiana’s future retirement policies and compensation plans.
See the PERF/TRF Budget Committee Presentation for additional details about each retirement system’s contribution rates, funding levels, and long term budgetary impacts.
Personal Services Contingency Fund, SEA 501 Plan Update (SBA)- The Personal Services Contingency Fund is used to pay for the state’s Retiree Medical Benefits Plan. The Retiree Medical Benefits Plan was established for elected officials and state government employees to help those individuals fund health insurance and medical costs after retirement.
An actuarial study of the SEA 501 Retiree Medical Benefit Fund revealed that Indiana has been overfunding this plan by $14M dollars annually, and has overfunded the plan by $50M to date.
State Budget Director, Adam Horst explained that if the legislature would like to reclaim these overpayments, they could write legislation that would send $50M dollars of dedicated funds (previously overpaid to the Personal Services Contingency Fund) to the General Fund for FY 2012 and FY 2013. The legislature was also encouraged to reduce funding for the Personal Services Contingency Fund by $14M dollars annually.
State Capital Projects and Leases (SBA/IFA) – The State Budget Agency is responsible for administering funds to help various state agencies pay for capital projects and leases. This year, state agencies were informed that the State Budget Agency would prioritize requests in the following order: lease payment assistance (tending to largest dollar amounts first), preventative maintenance requests, repair and rehabilitation requests, and finally, new projects or line items such as new construction and land acquisition.
The State Budget Agency explained that for the FY 2012-2013 budget request, they planned to fund all lease payment requests to ensure that the State’s legal obligations are met, and they plan to fund all preventative maintenance requests for this biennium to ensure that state agencies are maintaining existing facilities. All repair and rehabilitation project requests were reviewed by the Capital Spending Committee (comprised of the State Budget Agency, IDOA, Department of Public Works, and key agency stakeholders); however, the majority of the funds appropriated to these requests have not been released to date. The State Budget Agency released a total of $38,774,828 for new project requests, but Mr. Horst (State Budget Agency Director) did not explain the methodology for awarding these requests. A handout detailing the agency, project request and type, and the total amount of funds awarded by type (RR, PM, Lease, New Project) was presented to the Budget Committee at the meeting.
Indiana Finance Authority (IFA) – The Indiana Finance Authority was established in 2005 to oversee Indiana’s state-related debt. The IFA administers and manages payments for Lucas Oil Stadium, the Convention Center projects, and various other facilities and obligations across the state. The IFA also manages Indiana’s debt portfolio by appropriating general funds to lease agreements, issuing revenue bonds, and financing or refinancing the cost of acquiring, building and equipping structures for state use (including state office buildings, garages, highways, bridges, airport facilities, correctional facilities, state hospitals, etc).
The figure below is a summary of the outstanding debt that the IFA is currently managing. For more details about how each of these debt issuing entities are financed and paid for, please see the IFA Debt Overview presentation.
Indiana Department of Administration (IDOA) – IDOA centrally manages activities relating to state purchasing, the vehicle and aviation fleet, state travel, real estate leases, property disposition, and the Government Center Campus, among others. In addition to agency support, the department provides assistance to Minority and Women’s Business Enterprises interested in state contracting opportunities. Through its activities, IDOA helps to ensure the smooth function of state government, finding efficient and effective solutions to government-wide needs.
Some of IDOA’s significant saving reduction accomplishments include a facilities management project that replaced all incandescent light bulbs with compact florescent lamps on all floors of the State House, which resulted in an average monthly reduction of 129,472 kw and an estimated $67,703.89 savings over a six month period. IDOA also initiated efforts that reduced the size of the state’s fleet from 12,718 vehicles in 2005 to 9,984 vehicles on May 1, 2010. This represents a 21.5% reduction.
To see more of IDOA’s cost saving measures and additional details about IDOA’s procurement centralization plans and efficiency efforts please see the IDOA budget transmittal letter. IDOA’s budget request of $29,915,400 for FY 2013 is $4,440,811 less than the FY 2009 actual expenditure amount, a nearly 13% reduction.