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HomeMy WebLinkAbout07-06-99COUNCIL PROCEEDINGS OF THE COMMON COUNCIL OF THE CITY OF JEFFERSONVILLE, INDIANA JULY 6, 1999 The Common Council of the City of Jeffersonville met in regular session in the Multi-Purpose Meeting Room in the City-County BUilding, Jeffersonville, Indiana, at 7:00 P.M. on the 6th day of July, 1999. The meeting was called to order by Mayor Thomas R. Galligan, with Clerk and Treasurer C. Richard Spencer Jr. at the desk. Mayor Galligan welcomed all in attendance, asking all those present to stand as Councilperson Williams gave the invocation. Mayor Galligan asked all those present to join him in the pledge of allegiance to the flag. The roll was called and those present were Councilpersons John Perkins, Ron Ellis, Donna M. Frantz, Barbara Wilson, Andrew Williams III, and Vicki Conlin. Absent: Councilperson Peggy Knight Wilder. Clerk and Treasurer Spencer presented the da'un list for consideration by the Council, explaining additional claims. Following all discussion, Councilperson Perkins made the motion to approve the claims as presented as well as the additional, seconded by Councilperson Frantz, passing unanimously. Councilperson Frantz made the motion to pass Ordinance No. 99-OR-37, An Ordinance Amending 35.10 & 35.12 Of The Jeffersonville Municipal Code Concerning Sick Leave & Bereavement Leave on the third and final reading, seconded by Council President Conlin. Councilperson Ellis said he had requested numbers from Deputy Mayor McCauley regarding the effect this will have on the budget and he has not received the information. There followed a discussion of employee benefits as they relate to the police and fire benefits. The concern is for the $50 birthday pay. Following all discussion, the following roll call vote was taken: Ayes: Councilpersons Conlin, Williams, and Frantz. Nays: Councilpersons Perkins, Ellis, and W'dson. Councilperson W'flson would like to ask Deputy McCauley to come to a meeting. She does feel it is a good Ordinance but would like to have some areas checked. Mayor Galligan said this will July 6, 1999 Page 2 of 4 bring sick leave for ail employees the same. Counc'flperson Frantz said if the birthday pay is taken out there is a need to look at longevity pay for non police and fire employees. Bereavement should be the same for ail employees. Mayor Gailigan said if the only issue is the $50 he will vote yes to break the tie and pass Ord'mance No. 99-OR-37. Mr. Keith Campbell appeared before the Council explaining the reason for the request contained in Ordinance No. 99-OR-40A. Following ail discussion, Council President Conlin made the motion to suspend the roles for Ordinance No. 99-OR-40A, seconded by Councilperson Williams, passing unanimously. Counc'fl President Conlin then made the motion to pass Ordinance No. 99-OR- 40A on all three readings, seconded by Counc'dperson Williams, passing unanimously. City Attorney Anne Made Gailigan initiated discussion regarding the 1999 Circuit Rider contract. She will make a call and this will be put on the agenda for the next meeting. Councilperson Perkins said the Family Fest will be July 31, 1999. There are 5 barbeque contestants. He explained other aspects of the fest which will ail be held in Warder Park. Councilperson Ellis thanked City Attorney Galligan for sending a letter to those making the mess on Hamburg Pike. Councilperson Ellis is extremely concerned about what is going on in the housing projects. This past weekend there was another stabbing and shots were fired. There is a need for a police substation and a need to hire more officers. If there was a fire the City would send all the equipment. The Council and the Mayor need to do ail that is possible. There was discussion about closing Riddle Street. It is felt that most of the problems come from those that do not live in the area. Attorney Galligan explained there are other agencies working in the area. She explained a recent incident that the U.S. Attorney dismissed. Identification cards were discusse& The streets are public property and open to ail. Mayor Gailigan explained it takes 90 days to evict a resident from public hous'nag. The use of dogs was discussed. Mr. Bob Campbell of the Housing Authority suggests Councilperson Ellis meet with the Chief of Police to review housing statistics. Councilperson Ellis said he is out there everyday and most of the problems do not come from residents. There is a need to clean up the people and the mess and to help the residents feel safe. He has left pictures with the Mayor. Councilperson Ellis said people are afraid. There are gangs in Jeff. Problems need to be cleaned up at the source. Mayor Galligan understands. He is frustrated aiso as this is an ongoing problem. July 6, 1999 Page 3 of 4 Councilperson Wilson said there are areas that have the same problems, one of them being Colonial Park. Councilperson Wilson commented a good quality of life for Jeffersonville residents are the concerts in the park. They have been outstanding. She would love to see all the Council attend. This is one way of making Jeffersonville a better place to live. Councilperson Williams asked Mr. Bob Campbell of any housing authority plans. Mr. Campbell explained the current program of five homes a year. They are also looking at projects done in Louisville. Mayor Galligan told of funding programs. Councilperson Williams is in support of efforts of"hands on government". He is not in favor of using dogs. Mayor Galligan said one thing that he has learned in recent meetings is that people do fear dogs. Councilperson Frantz thanked those responsible for arranging to have Dr. Graham Tort speak. One of the things he mentioned that is important to her is the quality of life issue. Diane and Ed Muller and Ms. Beverly of the Parks Department, as well as others, are working with the youth. They are looking at doing a survey of needs for the youth. She will be asking at budget time for money for an outdoor pool and other areas for recreation. There are so many things that are needed. The youth need a place to go and something to do. There is a need for a skateboard area. Mayor Galligan reviewed four committees. There has been interesting dialogue with the schools. There is need for year-round programs. Quality of life is an issue. This area is lucky to have Louisville's amenities. Jeffersonville is growing rapidly and it is a strain on the needs. The Family Fest is an example ora good thing. There is a need for an aquatic center. Mayor Galligan reviewed significant changes. He told of plans for the old bridge. A lot of good things are happening, so there is a need to keep the press on. Mr. Jeremy Shelling told of things he has been involved in, stating he would like to get with Councilperson Ellis. July 6, 1999 Page 4 of 4 There being no further business to come before the Council, Councilperson Perkins made the motion to adjourn at 8:30 P.M., seconded by Council~rson Elli~s. p~s~g/~), nimously. ~ tv~x/'OR THO/9IA:~/Ri[G~LLIGAN ATTEST: . /~ ~/ CLE~d~ ~aND TREASUREF~. RICH~PE'NCER JR. Economic Strategy Unveiled Imagine living in a state with the fastest growing economy in the Midwest: · This state Would have a proliferation of home- grown businesses, many of them market leaders in the United States and abroad. · It would be a magnet for high growth clusters of industries, e.g., biomedi- cal and business soft- ware companies. · The educational system would prepare young people for high skill jobs and help retrain adults for bet[er and bet- ter oppormdities. · It would be world re- nown for its livable, vital communities. In short, the state just de- scribed could well be Indi- ana as it celebrates its bi- centennial in 2016. Break Away Growth details how Indiana can break away from competitor states by focusing on qual- ity economic growth and performing government functions exceptionally well. The aim of the plan is to be the best location in the Midwest for businesses and families. To reach its goal, Indiana must: bring wages back in line with the U.S. average; break away from over- reliance on traditional in- dustries; and embrace inno- vation and high perform- ance in order to be globally competitive. Continued on page 4. Why Should We Change Now? Indiana has fully partici- pated in the Midwest's manufacturing renaissance. New plants have come to the state. Employment is at an all-time high. Exports continue to break records and outpace the U.S. rote of growth. Investment from overseas firms has in- creased. Why, then, should the state change its strate- gies? While Indiana's cost of living and cost of doing business are well below most states, the average wage per job is below the national average as shown in the chart below. Wages that were once at the Continued on page 4 $31,000 Average Wage per Job, 1969-97 (1997 CPI Adjusted Dollars) $30,000 $29,000 $28,000 $27,000 $26,000 $25,000 $28,746 $29,809 1969 1972 1975 1978 1981 1984 1987 1990 1993 I996 Since 1981, indiana wages have lagged those of the nation. Inside this issue: Workforce Skills a P~ofit,/ 2 Ircpmve Mainstay Industries 2 Growth Corcpanies will Supplement 3 Take Advantage of Our Crossroads Location 3 Workforce Skills a Priority In the highly competitive global economy, businesses compete on price, value and responsiveness. One option is for firms to focus on offering the Iow- est price by util- izing a low skill, low cost workforce and "dumbing down" opera- tions. A second option is to com- mand a premium price but offer the high- est overall value. Finally, one could choose a hybrid option which combines price competitiveness and higher value. Both the second and third options require skilled workers and investments in technology. The second and third courses of action, while more demanding, are the paths Break Away Growth advocates. High value-added, innovative products strengthen companies' financial perform- ance, increase job security for skilled workers and improve workers' wages and incomes. High pay jobs do not necessarily require formal four-year college degrees. High pay jobs do, however, require high skills. Consequently, education and training of the workforce has become the No. 1 com- petitive issue in economic development. Indicators of skill levels of current and future workforce present a mixed picture. Currently, only 16.8 percent of Indiana's jobs require a bachelor's degree or hig~her, compared with 20.7 percent of all U.S. jobs. Many of Indiana's good pay- ing jobs require training other than a four-year degree, e.g., apprenticeship programs, vocational certificates and short course college "packages." It is important to recognize, however, that an increasing number of jobs will require post-secondary training of some sort. One of the most important steps the state could take to prepare for the future is to ensure that Indiana can respond quickly as industries' needs change. That effort would require high response, on-the-job training adequate to address the skills of large and small numbers of people. Continued on page Z Improve Mainstay Industries Strong mainstay industries -- manufac- turing, agriculture, insurance, trade and distribution, and higher education -- and a strong business climate remain critical to continued economic sustalnability. Indiana's industrial base has undergone a resurgence since the recessions of the '80s. Today, Indiana's unemployment rate is an unimaginable low: 3.1 percent as of January 1999. Manufacturing wages have been steady, remaining between 10 and 12 percent above the U.S. average. Likewise, as demonstrated by the chart, manufacturing productivity outpaces the nation. Hoosier exports are strong, bucking the national trend. During the first nine months of 1998, Hoosier exports ex- ceeded the prior year by 2.9 percent, while the U.S. level declined 1.1 percent. Long-term results are equally impressive. Since 1988, exports have grown an aver- age of 19.6 percent, compared to the na- tional average of 13.4 percent. Residents should have every reason to believe that Indiana can become the best location in the Midwest for businesses and families. Companies are drawn to states with lower costs. Indiana is in a strong position, with its combination of low business costs (17th best in the na- t~ tion) and low cost of living (14 best). Mainstay industries currently face a num- ber of competitive issues. The degree to which Indiana handles these challenges will determine its success in capitalizing on its great location and low costs. 110% 105% 100% 95% 90% 85% 80% concentration of manufacturing com- panies have resulted in family living wages for a great number of Hoosiers. Almost one-third of the Gross State Product depends on that sector (50 percent if indirect and induced effects Continued on page 6. 75% Productivity by Major Sectors (GSP per Worker, Indiana as a Percent of the U.S., 1977-96) 103.5-% 1977 1979 198i 1983 1985 1987 '1989 199i 1993 199S · [~"l'"Overall Manufacturing - - - Service Producing Source: Bureau of Economic Analysis · Indiana's industrial mix makes it vul- nerable to business cycles. A high Page 2 BREAK AWAY GROWTH Growth Companies will Supplement Traditional Industry Base On average, growth companies pay bet- ter, employ more highly skilled workers, export greater amounts, spend more on research and development, and provide better worker benefits and job satisfac- tion. These companies are the engines of Quality Economic Growth. Generally, a firm is considered a high growth company if its sales and earn- ings grow at a rate of 15 percent per year, or better. The firms come in all sizes and cross all industries. What they share is a focus on innovative, cutting edge products and services. Indiana already has several concen- trations of high growth, high pay companies, e.g., Elkhart, Warsaw and Indianapolis. The state's future vital- ity and wage and income growth, however, depend on having many more of these clusters. Diversifying Indiana's industrial base to include high growth niches is a logical step. Promising industries include bio- technology, healthcare, information tech- nology, advanced business services, envi- ronmental technology and services, ad- vanced logistics, and education and train- ing. They are also logical extensions of Indiana's existing economic base. At the same time, high growth, high pay companies are forming within mainstay industries, e.g., companies that develop software for manufacturers. Our college and university research capa- bilities and the state's ability to produce skilled workers will impact efforts to have growth companies locate and ex- pand in Indiana. Likewise, "smarter" government efforts to encourage net- In order to meets its goal of outpacing U.S. growth in wages and incomes, Indiana needs to increase its proportion of high growth companies. working among firms and regional high technology strategies can encourage busi- ness development. Equally important are efforts to improve Indiana's quality of life and retain highly skilled residents. BreakAway Growth proposes the follow- ing initiatives to accelerate the develop- ment of high growth, high pay firms: · Provide incentives to local equity in- vestment pools that form to assist small start-up ventures. · Shift the state's economic develop- ment budget over a five-year period to create a balance between incentives provided to mainstream companies and those given to frontier industries and high growth, high pay firms. Broaden the eligibility for personal property tax abatements and sales tax exemptions to include research and development and computer and high technology equipment. Focus state economic development programs and activities around self- selecting industry alliances, e.g., the Strategic Development Fund. Create the "Innovations Development Contingency Fund" as part of the state budget. The fund would provide state matching dollars for collaborative re- search and development ventures, ena- bling Indiana to capture greater share of federal funds. Take Advantage of Our Crossroads Location Indiana has an enviable geographic loca- tion. It is the Crossroads of America, the center of the world's most powerful industrial nation. The state has a powerful asset when one also factors in Indiana's portation system of rail- roads, highways, ports and airports, and its sUcong tele- communications system. Indiana can position itself as a global gateway by investing in superior trans- portation and logistics systems. Those invest- ments include: Make the highway ~rogram perma- nent. Create a "State Infra- structure Bank" to offer a revolving loan fund and loan guar- antees to communities. Establish an alliance between busi- ness and government to strengthen the state's transportation and logistics services industry. Provide a special fund for high profile marketing initiatives that promote Indiana as a prime location for trade, commerce and branch operations. VOLUME I, ISSUE 1 Pago$ Economic Strategy (cont.) Continued from page 1. There are three main strategies in the plan: 1. Improve the performance of mainstay industries. 2. Accelerate the contribution of frontier indus- tries and high growth, high t companies. 3. Follow policies that create a climate for growth. State government can best support the strategies by focusing on the climate for growth. Specifically, the plan recom- mends government make focused state investments in workforce skills, growth infra- vanced logistics, "smarter" govern- ment, and livable places. Why Should We Change Now? (cont.) Continued from page 1. national average have grown 0.8 percent since 1981. During the same time span, national wages increased 10.5 percent. Currently, 54 percent of Indiana jobs are in occupations that have a median wage below $10 per hour, or $20,000 per year. A recent analysis by the Indiana Eco- nomic Development Council, however, found that a family needs $17,000 to $32,000 per year to meet its basic needs (the amount varies based on family size and competition). Employment growth data is convincing: Indiana's eco- nomic develop- ment strategies have served us well for creating jobs. Now, the state must en- hance those strategies to move ahead in improving its standard of living. Global competition will continue to put pressure on prices. Manufacturing and agriculture production around the world has increased meaning that more of what Indiana produces can be also made else- where. As a resnk, Hoosier companies must specialize in hi~a value-added prod- ucts and services that command a pre- mium in the marketplace. Mainstay industries -- manufacturing, agriculture, insurance, trade and distribu- tion, and higher education -- will con- tinue to be a cornerstone of Indiana's economy. Over-reliance on th~ese indus- tries, however, makes us more vulnerable to recessions. By expanding cutting edge growth companies in traditional and frontier industries, Indiana can increase incomes and opportunities for job ad- vancement. H~gher pay jobs reward skill and innovation. Many produc- tion and service a four-year col- lege degree. They do, however, require increased levels of skill in technology, problem solving, teamwork and commu- nication. The state's economic development sys- tem must be geared up to meet demands for flexibility and responsiveness. The pace of the 21st Century will be even faster than that of today. State programs need the tools and customer-service fo- cus necessary to respond quickly and in a coordinated fashion. Page 4 BREAK AWAY GROWTH Guidelines for Policy and State Investments Philosophically, Indiana residents are conservative. They prefer to limit the size of government, even if that means a trade-off in fewer services. Hoosiers e~- peet a moderate tax load and Iow govern- ment debt. Residents respect those who pull themselves up by the bootstraps. Consequently, Hoosiers expect commu- nities to take initiative to solve local needs, and they protect the right to free enterprise. Keeping with the Hoosier spirit, Break Away Growth articulates five primary functions of government. If nothing else, local and state officials have a responsi- bility to do these things well: I. Provide a sound, fair and competitive tax and regulatory climate. 2. Produce efficient and excellent basic infrastructure and public services. 3. Foster ~rust and collective purpose by governing and planning in an open and fair manner. 4. Compete with other states and coun- tries by creating attractive environ- ments in which businesses and resi- dents thrive. 5. Intervene for strategic purposes and for limited periods of time to improve and correct market weaknesses and to advance market solutions. A healthy fiscal climate is a pre- condition for business confidence in the state. Thus, maintaining sensible budget reserves and continuing to buy-down state pension liabili- ties (Indiana's only fiscal vul- nerability) make for sound eco- nomic strategy. In keeping with the state's commitment to avoid long-term liabilities, Break Away Growth assumes that state funding for traditional economic development -- programs that provide direct one-on-one subsidies and technical assistance -- will not ~ow. Sound fiscal discipline demands that public funds shift from the old grant-in- aid approach to self-help initiatives. This plan, therefore, reduces emphasis on grants to spur economic development. Instead, the emphasis is on loans, loan guarantees and loan loss reserve pools. While government should not directly create jobs or invest in firms, it can, and should, create a climate for Quality Eco- nomic Growth. It can make stra- mentsthat: vith skills demanded by industry. · 'Accelerate the development of growth compames. · Capitalize on Indiana's prime cross_ roads location. · Streamline government functions. · Improve the qual/ty of life. Government can Lead the Charge to Innovate Indiana is in an excellent position to pur- sue "smarter" government. It already fol- lows the tenets of limited government, a moderate tax rate, low debt and local ini- tiative. "Smarter" government wilI require three innovations: 1. Find ways to perform ex- ceptionally well. 2. Implement performance- based designs for public services that have high stan- ~. dards of accountability. 3. Find solutions that mini- In particular, greater flexibility and a greater range of options are needed to solve problems. For example, more of what the federal government funded in the past has shifted to local areas. Consequently, communi- ties must cope with addressing more demands with fewer re- Sotlrces. Likewise, to be truly effective in economic development, communities must look at is- sues such as transportation, infrastructure, worker skills, mize or eliminate the role States prosper when government functions well and local of public bureaucracies, leaders and regional alliances work in tandem. This effort to maximize both the effi- ciency and effectiveness of government the environment and a host of items from functions calls for fundamental changes, a regional perspective. Sub-state sohi- VOLUME 1, ISSUE tions are required to achieve economies of scale, efficient financing and coordi- nated solutions to issues that cut across boundaries. Yet, coping with multi- jurisdictional issues can be challenging. Break Away Growth proposes several !nitiatives to increase local flexibility and m~prove the state's customer service and coordination functions. · Increase the number of options for, and flexibility of, raising local govern- ment revenue. Steps include raising caps on local tax options, exploring new options and increasing the prop- erty tax rate limit. · Restructure local property tax limits to avoid penalizing growth communities. · Provide sub-county and county-level options to enable consolidation of Continued on page 6. rag~ $ Livable, Healthy Communities Essential to Increasingly, families and employers will pay premiums m live in places that are safe, clean and in harmony with nature. People will seek out communities that enhance the natural land- scape, prevent pollution and are designed with conven- ience in mind. The well-being of residents relate directly to factors re- lated to environmental condi- tions and healthy lifestyles. Indiana communities rank high on many quality of life factors, but fall behind their peers in attaining environ- mental and health standards. This plan focuses on policies that address the concept of sustainable economic de- velopment: maintaining or improving Indiana's standard of living, agricultural yields and industrial pro- ductivity without compro- mising the support systems that make those results ~ possible. · Further the work of the Farmland Preservation Task Fome related to ur- ban devel- tn the 21~Centu~, skiller workers will demand g°°d places opment to live and work. Indiana has an opportunity to creato sus' and non-- toinable eeonoraic development that balances today's metropoli- needs with tomorrow's, tan Promote Growth · Expand tax increment financing to a variety of applications. · Create an aggressive brownfield de- vehipmeut incentive package. · Create the "Sustainable Economic De- velopment Corporation," a state-level private or public-private entity to in- vest in and provide technical assis- tance related to sustainable develop- · Provide for performance-based pollu- tion prevention tax credits. · Coordinate a statewide Geographic Information System. Government Innovation (cont.) Continued from page 5. units of government or the services offered by local governments. · Provide state matching funds to sup- port sub-state and mniti-jurisdictional ~owth and development planning. · Facilitate the simplification of re- gionai boards and commissions in or- der to encourage regional strategies and requests for state funds. · Establish a coordinated, automated one-stop permit process. · Provide line-item funding for the State Information Center and launch a Web- based pilot program to transfer infor- mation. · Coordinate mad consolidate all state development finance functions under the Indiana Development Finance Authority. Mainstay Industries (cont.) Continued from page 2. new high growth clusters within the performance of mainstay industries: are included). Most of Indiana's manufacturing companies are in highly cyclical industries: autos, steel, industrial machinery and fabricated metals. Fluctuations in national and global demand for durable goods rap- idly impact the state's economy, as they did in the recessions of 1980 and 1982. · Our companies face significant tech- nological changes. For example, ~on- gress has issued new mandates to prove fuel efficiency by 2004 and 2011. Indiana's auto-related compa- nies will need to innovate to meet the requirements. While daunting, the change could present opportunities for page 6 automotive sector. The bulk of U.S. economic gains are coming from advances in technology, productivity and worker skills and knowledge. Successful firms find niches that combine cost competitiveness, innovation and a "total solution" that addresses customer needs before, during and after the sale. Break Away Growth proposes several strategic investments to improve the · Increase worker productivity by maxi- mizing educational opportunities, im- proving utilization of education and training services, increasing informa- tion about the performance of all post-secondary pro- grams, and improving ac- cess to, and affordability of, educational and training programs. · Strengthen Indiana's already outstanding distri- bution system. · improve the state's information sys- tem and create very efficient govern- ment regulation. BREAK AWAY GROWTH This update is the fourth in Indiana's series of strategic plans for economic development prepared since 1982. The Indiana Economic Development Council, Inc. is a public-private partnership that brings business, labor and education to the table to reach consensus and develop commitment to creating a long-term strategic advantage for the state. Indiana was the first state to create an independent strategic planning entity The l~lanning process, refined over JO years, ensures conststency, continuity and credibility over time. In effect, the process stretches political lead times into economic lead times. Workforce Skills (cont.) Continued from page 2. There is concern that as job tasks become more technically complex and require more problem solving and people skills, Indiana workers may not yet have the full set of matching skills. A recent Indiana Economic Development Council study estimates that for every 100 high skill job openings, only 65 job applicants had the mix of skills required. While 76 percent of the jobs do not require a formal post- secondary degree, they do require contin- ual training, much of it on the job. Formal education rates are lower than the national aver- age. Currently, Indiana's public high school graduation rate is 70.1 per- cent -- 30th in the nation. Only gree or higher -- 47th in the nation. Conversely, Indiana is the 14th largest producer of college graduates in the na- tion. These graduates represent a steady supply of workers that possess the knowledge and technical expertise needed to attract and retain high growth, high skill companies. In part, these statistics reflect the legacy of manufacturing. As mentioned earlier, fewer than 20 percent of jobs require a four-year degree. Therefore, Break Away Growth calls for a well-structured career track for the non-college bound and in- cumbent workers to ensure these Hoo- siers have skills that meet industry's needs. Specific steps Indiana should take in- clude: · Provide consumers with timely infor- mation on the performance of all ele- 17.7 percent of adults have During 1996, Indiana ranked third in the nation in terms of the number of new business development projeets, lhat same completed a year, Indiana landed seven high-tech facilities-the fourth-highest numberin the United States. (Area Development four-year de- magazine) Indiana's educational and reseamh prowess could present an oppodunityto continue this momentum. VOLUME 1, ISSUE 1 mentary, secondary and post- secondary programs. Create a "Lifetime Opportunity Debit/ Credit Card" to ensure financing is convenient and affordable. Launch the "Indiana Career Learning Account," a line of credit for post- secondary education to which employ- ers, philanthropic organizations and state government could contribute. Offer tax incentives to companies that train and educate their workers. Develop performance-based training that is customized to employers' needs and enhance the state' s Training 2000 program. Reform Indiana's workforce develop- ment and training system to take ad- vantage of opportunities opened up by federal restructuring. Changes in regu- lations open the way for improved customer service, econo- mies of scale and new information technology. Page 7 We're on tile Webt. 1 www.iedc.org Four Core Challenges Must be Addressed Achieving the goals and milestones set forth in Break Away Growth will not be without difficulty. Indiana faces four core challenges: improving incomes, wages and hig~h skill, high pay jobs; creating sustainable growth; keep- ing the middle class from slipping into the category of "the working poor"; and shaping new patterns of development in urban and rural ar- eas. Over the past two decades, Indiana repositioned itself after back-to- back recessions. Since 1986, in fact, average job growth has been faster than the nation and the unemploy- ment rate has been below that of the United States. Mainstay industries are sensitive to na- tional business cycles. Reaching a level of productivity and industrial diversity that reduces the impact of recessions is an important safeguard. Indiana is a middle income, middle class state. A greater proportion of Indiana households are in that category than re- flected by the nation as a whole, and fewer people live in poverty. In large part, the phenomenon is explained by a greater number of households with two parents and multiple job holders, more overtime work and good paying manu- facturing jobs. The challenge is to ensure that current and future workers have skills to ensure continued family wages. For 73 percent of Indiana jobs, skill reqdirements can be gained through on-the-job train- ing. That number will remain virtu- ally unchanged in the foreseeable future. Consequently, increasing skills through work-based training, short courses and distance learning will be an essential means of stabil- ity and upward mobility for many Hoosiers well into the next century. The fastest ~owth areas in the state are in small- to mid-size cities and towns, and in counties on the fringe of metropolitan areas and along interstate highways. Among the negative consequences of the migration are loss of farmland, decline in the core of cities, and increased demands on schools, municipal services and water, sewer and drainage infrastructure. Employment and Wages · Indiana's per capita income is $23,I83 (92.1 percent of the U.S. average); 29th best. · Average job growth 0utpaced the nation from 1986 to I998. · A record number of Hoosiers are employed: 3.5 million (1997). · Eighty percent of workers are cov- ered by unemployment insurance: 2.8 million. · Since 1986, the unemployment rate has been below the nation. · As of January 1999, the unemploy- ment rate was 3.1 percent -- below the national average. · Managerial andprofessionaljobs comprise 23 percent of Indiana jobs, compared to 29 pement for the nation. · Fifty-four percent of Indiana's jobs are in occupations with a median wage below $10 per hour ($20,000 per year). Only 7 percent of jobs have a median wage above $20 per hour. Average Wage per Job, 1969-97 (1997 CPI Adjusted Dollars) $31,000 $28,74~ $30,1100 $29,000 $28,4Sl $27,046 $25,1100 1969 1972 1975 1978 1981 1984 1987 1990 1993 1996 Wages were last at the national average in 1981. Since that time, Indiana wages grew 0.8 percent while the national average climbed 10.5 percent. · A family's basic needs budget is between $17,000 and $32,000 per year (depending on the size and composition). · To return to the national average, Indiana wages need to outpace the nation by approximately 0.4 percent per year for the next 20 years. · Production workers in manufactur- ing earn $14.32 per hour; 110 per- cent of the U.S. rate. · An estimated 195,300 Hoosier manufacturing jobs are directly re- lated to exporting, and they pay 5 to 20 percent mom than those not re- lated to exporting. Business Vitality · In 1996, Indiana had 143,507 busi- ness establishments. · Productivity is 20th highest in the nation and fifth highest in the Mid- west at 90.5 percent the national rate. · Manufacturing productivity is at 103.5 percent of the U.S. rate; serv- ices are at 80.3 percent. · The cost of doing business (as measured by Regional Financial Associates, 1997) is 17th best in the nation, and well below competitor states. · Indiana' s business climate was named one of the top 15 in America by Site Selection magazine (1998). · Indiana exported $13.1 billionin goods during 1997 -- an increase of $1 billion over the year before. During the frrst three quar- ters of 1998, exports continued to be strong, increasing 2.9 percent, while the United States declined 1.1 percent. The top export destinations are Canada, Japan, United Kingdom, Mexico and Germany. Continued on back. Business Vitality (cont.) Annual GSP Growth, 1989-96 6% 4% 2% 0% -2% Contlnued from front. · Manufacturing's share of Indiana's Gross State Product (32 per- cent) is the highest in the nation. · Area Development magazine ranked Indi- ana third in the nation in terms of the number of new business develop- ment projects in 1996. The Gross State product is $155.8 billion: manufacturing 32%; services 15%; finance, insurance and reai estate 13%; retail 9%. · During 1996, AreaDevelopment ranked Indiana fourth in the number of new high-tech projects. · Indiana is one of the top 25 inland places to locate a business (Business Facilities magazine, 1998). · Indiana ranks 10th in the United States in terms of the volume of rail cargo (Plants Sites & Parks maga- zine, 1997). Education · Indiana is the 14th largest producer of college graduates in the nation. · The state's public high school graduation rate is 70.1, 31st in the nation. · In Indiana, 16.8 percent of jobs m- quire a four-year college degree or higher, compared to 20.7 percent of all U.S. jobs. · The rate of college attainment closely matches job require- ments: 17.7 percent of adults have a four-year degree or higher (47th in the nation). Livability · The population is 5.9 million. · Indiana's purchasing power ranks 29th best at 99.5 percent of the U.S. average. · The consumer cost of living is 14th best at 92.1 percent. · The poverty rate of 8.6 percent is fifth best in the nation and second best in the Midwest. · Indiana ranked best in the Midwest (22nd in the nation) in the 1998 Morgan Quitno Livable State Index. Economic Development Resources · The state's budget for FY 1997-98 was $13.7 billion. · Economic development receives 0.4 percent of the state's budget ($55.6 million from the General Fund). · Indiana's economic development resources from all public sources (state, federal and local) totals ap- proximately $2 billion per year.