Poor health and lack of new business hurting Hoosier economy, Chamber says

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By Abrahm Hurt
TheStatehouseFile.com

INDIANAPOLIS–Indiana’s healthy economy could be undermined by a low growth of new businesses and high smoking and obesity rates, the Indiana Chamber of Commerce said in a report issued Monday.

“Our unemployment levels have been below the national average and our surrounding states for a long time,” said Kevin Brinegar, Chamber president and CEO. “But if we’re not generating new business at a fast-enough rate, we’ll have challenges down the road.”

The chamber’s Indiana Vision 2025 Report Card was developed by a statewide task force of community, business and education leaders and was released in 2012. Brinegar, in a press conference to discuss the report, focused on the business and health factors.

The report assesses the state’s overall health and includes 33 goals in four critical areas—outstanding talent, attractive business climate, superior infrastructure, and dynamic and creative culture.

The chamber’s report found that Indiana continues to struggle in the Kauffman Foundation Index, which measures new entrepreneurs, and total employment at firms less than five years old. The state ranked 47th out of the 50 states in both categories.

In 2017, 0.199% of Hoosier adults started a new business compared to the U.S. average of .331%. The total employment for firms that were zero to five years old was 8.1% while the U.S. average was 11.2%.

Conversely, Indiana ranks fifth in job creation for existing businesses that are six years and older.

The Vision 2025 report found there is a $6.2 billion annual business impact in health care costs and lost productivity from smoking in Indiana.

“That’s real money that’s not going into wages, salaries, benefits, health insurance, training and planned equipment modernization,” Brinegar said. “It’s just going out the window.”

Indiana’s adult smoking rate increased to 21.8% in 2018 from 20.6 percent in 2016, which is now 44th worst among the 50 states. The Indiana Chamber would like to see smoking levels in Indiana reduced to less than 15% of the population.

Adult obesity levels also increased from 31% in 2015 to 33.6% in 2017, which is 39th worst among the 50 states.

In the 2019 session, Indiana legislators took no action on measures aimed at reducing rates of tobacco use and vaping, including higher taxes and raising the smoking age from 18 to 21.

How to tax and regulate vaping products will be studied by lawmakers in a summer study committee.

Brinegar said the Indiana Chamber still supports higher tobacco taxes and raising the age to purchase tobacco products.

“The best way to deal with it is to not get them to ever start,” he said. “When you consider that 95% of all individuals who’ve smoked throughout their lives started before age 21, it’s really key to focus on raising the age as well as raising the tax.”

Gov. Eric Holcomb said during the session that there isn’t much support for a tax increase among legislators, which is why he didn’t pursue a higher tax on tobacco products.

Brinegar said addressing the obesity increase is much tougher than the smoking.

He said the state used to have a wellness tax credit that would help offset the cost for employers that set up wellness programs, and the chamber has been trying to get that re-established.

Brinegar said support for trails, the cultural opportunities, the outdoor opportunities that are being done with things like the Regional Cities Initiative and the focus on quality of place will help as well.

On Monday Indianapolis business leaders, legislators, and the chamber met to discuss the report card in a regional forum.

Upcoming forums will be in Hammond, Evansville and Fort Wayne. The forum allows the chamber and others to discuss results, share best practices and receive feedback.

Abrahm Hurt is a reporter for TheStatehouseFile.com, a news website powered by Franklin College journalists.