David Hoppe

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:: John Gregg loses it

Hoosier Handshake a raw deal

By David Hoppe

I'm sorry, but John Gregg must be out of his mind.

In case you hadn't heard, Gregg is the Democrats' candidate for governor. He's running against Mike Pence, the silver-haired darling of right-wing Republicans. Pence has used six terms as a member of the House of Representatives in Washington, D.C. to sharpen his media profile. He's been on the talkshows, calling for the defunding of Planned Parenthood and giving seniors coupons instead of Medicare to help pay their doctor bills. There were many in the outer reaches of the drown-the-government-in-the-bathtub movement who thought Pence would make a dandy candidate for president.

Gregg, on the other hand, is known mainly for his walrus mustache.

As is typical in Indiana, when one party comes up with a candidate burnished with what, in politics, passes for celebrity, the other party obligingly keels over and holds its paws in the air. It appears no one on the Democrat side had the gumption to truly challenge Pence on how his essentially anti-government beliefs might serve a state where cutting government services to the bone has done nothing to improve one of the lowest rates of household income in the nation.

Gregg, a former Speaker of the Indiana House, apparently agreed to take one for team.

But rather than offering creative proposals to distinguish himself from Pence, it seems Gregg has decided to try running round his opponent's right flank. Last week he pledged to eliminate corporate taxes for companies with their headquarters in Indiana, or for those who would move their headquarters here. Gregg would also give tax credits to companies doing life sciences and advanced manufacturing work. He calls his plan “a Hoosier Handshake.”

Gregg's handshake would wring about $350 million dollars out of Indiana's annual revenue stream. He claims this loss could be made up through the collection of online sales taxes, a proposition John Ketzenberger of the Indiana Fiscal Policy Institute told the Indianapolis Star was “pretty iffy.”

Gregg, like so many of his fellow Hoosier politicians, wants to believe that taxes are the only thing standing between Indiana and the state's next business boom. The trouble with this nugget of magical thinking is that, when it comes to business taxes, Indiana is already one of the friendliest states there is. The nonpartisan Tax Foundation ranks the Hoosier state as having the eleventh best tax environment for business in the country.

Cutting business taxes, also known as trying to bribe businesses to locate here, is not what's holding back Indiana's economy. If this was true, the tech companies in high tax California would be making the Wabash Valley the new Silicon Valley.

That's not happening. The reason it's not happening is because Indiana has one of the most poorly educated workforces in America. For generations, you didn't even need a high school diploma to make good money in Indiana manufacturing. Kids dropped out of school because spending those last two years studying the Gettysburg Address and dissecting frogs seemed a waste when they could be earning enough cash to buy a car or make a down payment on a house by working a factory line.

This was the Indiana way until the 1980's, when many of the state's independent manufacturing plants starting closing in the wake of a national recession. Globalization did the rest. What we've been finding out since is that it's hard turning generations of contempt for education into a culture that truly appreciates the value of knowledge. It's one thing to see the statistics about employability and hear the exhortations of state leaders about the importance of academics. But when so many of the state's citizens lack any real experience of having achieved in school, turning the recognition that education is important into meaningful action, let alone paying for it, is easier said than done.

John Gregg says he wants to cut business taxes in order to create jobs. This echoes the Republican mantra that business leaders are “job creators.” But that's only partly true. Workers are the wealth creators for business owners, who can't accomplish anything without a pool of able employees capable of turning their business plans into profits.

What makes Gregg's tax cutting idea nonsensical is that cutting business taxes threatens to create more pressure to cut funding for education, which accounts for the largest share of the state's budget. Many schools, from K-12 to state universities, have been hit with budget cuts due to property tax caps and legislative budget machinations. Meanwhile, nearly two-thirds of the state's elementary schools have failed to teach 90 percent of their third graders to read at an acceptable level according to the Indiana Dept. of Education.

Rather than trying to get attention by promising tax cuts to constituents who don't need them, Gregg would be well-advised to do something Mike Pence can't imagine: come up with a comprehensive plan aimed at making Indiana a national leader, not only in K-12 education, but in training programs that actually help Indiana adults find and keep jobs. The collapse of traditional manufacturing in this state has put an entire generation on the scrap heap. Making Indiana an even cheaper place to do business than it is now won't do anything to help them.