A Citizen's Guide to Indiana

Masson's Blog

Centennial of Prohibition

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Yesterday marked 100 years since Prohibition went into effect, one year after the 18th Amendment was ratified by the states. Indiana ratified the amendment on January 14, 1919. As Douglas Wissing recounts in “IN Writing: Uncovering the Unexpected Hoosier State,” former baseball player and evangelist Billy Sunday thundered on the radio from Winona Lake, Indiana:

The reign of tears is over. The slums will soon only be a memory. We will turn our prisons into factories and  our jails into storehouses and corn-cribs. Men will walk upright now; women will smile, and the children will laugh. Hell will be forever for rent.

Indiana had already gone dry as a result of statewide legislation passed in 1917. The Indiana Anti-Saloon League had been active in the state for decades and the “dry” legislation was the subject of a massive organizational push by the IASL.  Something like 25,000 supporters apparently descended on Indianapolis in January 1917. 175,000 names showed up on petitions delivered to legislators. The measure passed the House 70-28 and passed the Senate 38-11.

The debate about alcohol had been swinging back and forth in Indiana to some extent since the state’s inception. The battle against alcohol was seen as a battle against immorality, crime, and domestic violence. By the 1840s, some counties were using a “local option” to go dry – Carroll and Cass Counties were the first. In the 1850s, the temperance movement was bolstered by the Know Nothing movement. Drinking was characterized as the habit of foreigners – Germans, Irish, Catholics and the like.  Statewide prohibition was passed in 1855. The law was declared unconstitutional in 1858 and, by then, the state had other things on its mind. The slavery issue and the Civil War put the temperance movement on hold (as it put so many things on hold). After the Civil War, the temperance movement seems to have returned to the pre-Know Nothing status quo with Republicans generally supporting “local option” measures and Democrats recognizing drinking as a “social evil” but wanting to confine regulation to a licensing system. Among other things, alcohol was big business in the state: “In 1879 Indiana still had seventy large breweries and a number of distilleries producing liquor from locally grown corn and rye.”

In the late 19th century, temperance would get another big boost with the Progressive Movement. The Progressives were a mixed bag. Their impulse was to use regulatory authority to combat poverty and disease. They helped bring about women’s suffrage, push back against political machines, break trusts, clean up the food and water supply, professionalize academics and government service, and strengthen the labor movement. But, with the Progressives, you also get things like eugenics and prohibition. During this period, the Indiana Anti-Saloon League formed. In the early 1900s, they were successful in obtaining passage of increasingly restrictive liquor laws. More than 2,500 saloons closed in Indiana between 1900 and 1910.

World War I allowed the temperance movement to roll anti-German sentiment and austerity needs into their campaign. We needed grain to feed a war-ravaged Europe. Former governor Frank Hanly was active on the lecture circuit, advocating prohibition. In 1918, he railed against the brewers, saying Hoosier Brewers had “the arrogance of the Hun.” As a result of the 1917 state legislation, Indiana went dry on April 2, 1918. On January 14, 1919, Indiana ratified the Eighteenth Amendment. Nationally, Prohibition took effect on January 16, 1920. And, of course, since then, slums have become a memory; prisons have been turned into factories; men walk upright, women smile, and children laugh. We’re still working out the lease details for Hell.

I joke of course. Enforcement was a problem. Breweries closed down but prisons did not. Jails became clogged with Prohibition violators and organized crime spiked.  There was a lot of corruption in Indiana, as elsewhere. As Prohibition wore on, the prohibitionists would make common cause with the Ku Klux Klan who shared their conservative politics and would use the machinery of the old White Cap organization, the Horse Thief Detective Association, to enforce the prohibition laws. That said, it’s a mistake to think that Prohibition was the work of some fringe zealots who caught lightning in a bottle, managing to be at the right place at the right time to pass Prohibition against the will of just about everyone else. It was a long term social movement with a significant base of support. It was only hard experience with the failures of Prohibition that was effective in eroding that support.

SB 390 – Charter School Oversight and Transparency

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Sen. Ruckleshaus has introduced SB 390 which would provide some additional degree of oversight and accountability for charter schools. In the wake of recent events, there certainly seems to be some cause for this sort of initiative. Whether it’s sufficient, I couldn’t say. The bill requires two members of the charter’s board to live within the boundaries of the school district in which the charter is located and requires at least 50% of its meetings to take place within those boundaries. The bill requires an annual audit of all public and private funds by the school and the charter school organizer (notwithstanding the rule that says an entity receiving less than 50% or less than $200k in public money will only be audited with respect to matters relevant to the public money received). A charter school organizer would be considered a public agency for purposes of the Access to Public Records Act.

Additionally, the charter school and charter school organizer would be required to post online a copy of the audit, the school’s most recent enrollment count, and a list of the salaries of each individual employed by the organizer. It also creates an enforcement mechanism whereby the Department of Education can issue findings with respect to waste, fraud, abuse, or misrepresentations made by the school or its organizer along with recommendations to the State Board of Education to penalize the charter or revoke its authorization. The bill also provides for creation of a study committee to study the need for additional charters and potentially a moratorium.

If charters are going to work, they require pretty strict oversight. Massachusetts has had some success by, among other things, prohibiting for-profit Education Management Organizations, allowing only the State Board of Education to authorize schools, and imposing rigorous authorization and re-authorization standards. Indiana’s regime is much looser. This would tighten it up somewhat.

SB 328 – Teacher Personal Financial Responsibility Training

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Senator Zay has introduced SB 328 which generally tries to promote the instruction of students in “personal financial responsibility.” It creates a grant fund to pay entities to implement teacher professional development programs to teach them how to conduct financial responsibility instruction. The State Board of Education is directed to create guidelines for the grants which include providing evidence-based training to a teacher who has no background in the area. It also directs the State Board to enter into a contract before September 30 “with an organization that provides a nationally recognized  training program for professional development in personal financial responsibility education from early learning through secondary education.” Based on this, I strongly suspect such an organization exists, and I would be a little surprised if that organization is not the moving force behind this legislation. (But it could also just be part of a general “personal responsibility” ethos.)  A teacher who completes such training would be eligible for supplemental compensation from a school district.

The Department of Education is given some discretion in determining the content of the training, but the legislation requires that it be effective in teaching “personal financial responsibility, entrepreneurship, and economic systems with an emphasis on free market economic systems.” The legislation is frustratingly vague with respect to what it means by “personal financial responsibility.”  This American Prospect article discusses the nationwide popularity of “financial literacy” programs and the sketchy foundations on which they rest. Law professor Lauren Willis has emerged as a leading critic of financial literacy education:

She’s since emerged as a leading critic of financial literacy education, which she says is pushed by large financial interests that fight commonsense reforms to help consumers make safer choices. “We don’t ask consumers to fix their own cars,” she says. “People aren’t dumb, they’re just busy, and we should regulate around those things, with the assumption that there are certain things a consumer can do and other things they can’t, and that it would be silly to ask them to do.”

Willis also notes that there’s nothing about financial education that’s designed to teach students how to challenge the economic system. For example, it does not involve teaching people how to organize unions and collectively bargain for defined-benefit retirement plans—even though we know pensions have helped millions lead more financially secure lives. “Financial literacy education sends the message to people that if they’re in financial trouble, then they must have failed to make the right decisions,” she says. “It’s not designed to say, ‘Hey, society is not organized in a way that gives everyone equal opportunity and we want to teach you the skills to challenge that.’”

(SB 328’s emphasis on entrepreneurship and free market economic systems is a give away as to the preferred bias here.) The cost of such education does not seem to be justified by its benefits. John Lynch, director of the University of Colorado’s Center for Research on Consumer Financial Decision Making: “The cause of financial literacy education is so good, and it sounds so plausible, but to me that’s like saying obesity is a major problem so let’s give billions of dollars to some particular fad diet,” Lynch says. “It’s an utter waste of time to be teaching this stuff, the effect sizes are trivial in magnitude.”

I’ve suggested before, and have not been dissuaded that this would be useful, that the State should come up with a model household budget for various levels of income:

This plays somewhat on an idea I’ve had for awhile – that it would be useful for the State to provide a model budget for its citizens based on various income levels. My initial impulse for this was that a lot of citizens are bad with money, and there are often complaints that poor people have enough to live on, but they’re making poor spending choices (e.g. cable, cell phones, tattoos, cigarettes). Perhaps a model budget would help — one for poverty level, one for median income, and maybe model budgets for other income levels. On the other hand, it would be a little uncomfortable if that model budget for median income revealed that the middle class simply could not afford the things we normally associated with “middle class.”

That’s the type of financial literacy I could get behind. But, if financial literacy education is just going to be a talking point that policymakers use when they’re accused of ignoring structural problems with the economy, then it’s probably not worth the effort. This reminds me of the popularity of the “skills gap” myth.  There is a deep desire to regard the economy as a morality play where poverty is evidence of sloth and wealth is evidence of moral probity which allows us to complacently let the rich stay rich and absolves us of any duty to the poor. (But, I’m probably getting ahead of myself here — loading up SB 328 with freight that might well not be intended by Sen. Zay.)

SB 261 – Local control over school training requirements

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Sen. Spartz has introduced SB 261 entitled “school deregulation” which makes discretionary a number of mandatory training provisions imposed on schools and teachers by the State. In particular:

  • 1. Recurrent training on alternatives to restraint and seclusion.
  • 2. Bullying prevention training.
  • 3. Criminal awareness programs and school employee training.
  • 4. Training on child abuse and neglect.
  • 5. Suicide awareness and prevention training.
  • 6. Human trafficking identification and reporting.
  • 7. Seizure recognition and response training.

None of these are bad things. They all seem very valuable. None are frivolous. However, this sort of thing adds up. Schools have only so many resources and teachers have only so many hours in the day. Decisions about education policy are usually best the closer they get to the classroom. This legislation would allow local schools to decide what type of training is necessary, beneficial, and within their means.

HB 1117 – Business Damages to Lessees in Eminent Domain Claims

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Rep. Shackleford has introduced HB 1117 which provides for an award of business damages to lessors in eminent domain cases. If I had to guess, this is a reaction to the case of City of Kokomo v. Estate of Audra Newton. The bill defines a “business owner” as someone who owns and operates a business that was established at least five years prior to the eminent domain action. (It does not necessarily require that the business be in operation at the location that is the subject of the action for that long prior.) It requires the governmental entity exercising the power of eminent domain to notify the business owner. It then gives the business owner six months to submit a claim for business damages along with supporting documentation for the claim. Within four months after that, the person exercising eminent domain has to respond or else the counter-offer will be deemed to be $0. In the condemnation proceedings, the business owner is entitled to prospective and consequential damages sustained as a result of the condemnation. The legislation also expands attorney’s fees. Current law says that if the judgment awarded is better than the last offer by the government, the property owner can get attorney’s fees of up to $25,000. The proposed legislation would mandate a percentage of the benefit received be added as attorney’s fees (e.g. 33% of benefits up to $250,000) plus a discretionary (I think) kicker of additional fees on top of that under traditional fee shifting rules.

In the Newton case, the real estate was owned by Audra Newton who passed away. Her son inherited the property. For many years the parcel (“Main Street parcel”) was used by Kokomo Glass along with an adjacent parcel not being taken by the city (“Union Street parcel”). In December 2016, the City of Kokomo filed a condemnation complaint. The appraisers came back with a $100,000 valuation for portion of the Main Street parcel and $43,000 in damages to the residue (in other words, damage to the property owner for property not taken but not as valuable because of the loss of the portion that was taken). The City deposited the $143,000 with the court and received an order from the court entitling it to take possession. Kokomo Glass was no longer able to operate in that location. The Estate filed an objection to that amount, claiming it wasn’t enough. The City increased its offer to $160,000 before trial, but the Estate still declined and the matter went to a jury. The jury awarded $100,000 for the Main Street parcel and $205,600 for damages to the Union Street parcel. The court also entered judgment for the maximum $25,000 in attorney fees. On appeal:

The City contends that the Estate presented no evidence at trial that it had sustained any damages in excess of the $100,000 in damages for the taking of the Main Street parcel. The City points out that each element of additional damages alleged at trial were damages to Kokomo Glass, which is not only a separate entity from the Estate but is not an owner of either parcel. The City maintains that the only damages it owes to the Estate is $100,000, which is the fair market value of the Main Street parcel. We must agree.

Kokomo Glass was an S Corporation owned by the son who paid rent to the mother and then, after her passing, to the Estate. It was never made part of the litigation. The Court of Appeals observed in a footnote that “The holder of an unexpired leasehold interest in land is entitled to just compensation under the Fifth Amendment, for the value of that interest when the land is taken by eminent domain. Tenants are thus entitled to compensation for an unexpired term of a lease terminated by condemnation.” If I had to guess — and this is only a guess — Kokomo Glass’s leasehold interest was probably fairly short. Year-to-year or month-to-month or something. So, while the glass company would want to argue that, basically, the government should be responsible for disruption to the business for years in the future; the government would be arguing that the company only had a remaining lease term of a few months or whatever — they aren’t required to pay for a speculative renewal of the lease. The “business damages” referenced in HB 1117 arguably go beyond the value of the unexpired portion of a lease.

My objection to this is of a general nature where I feel like it’s an attempt to maximize corporate rights while allowing people to continue using the corporate form to minimize liabilities. If the government is taking the real estate, the business is getting more extensive rights to the real estate that the government has to pay for. But, if a creditor was going after the business for unpaid debts, you can rest assured that the creditor can’t get at the underlying real estate. Totally separate entities. The business only has a few months left on its current lease, you see. Not worth very much at all!

Interactive Legislative District Map

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I saw this on the Indiana subreddit: an interactive legislative district map. Per u/Jelfff:

When the map opens the Indiana state house districts are displayed with semi-transparent coloring showing the party affiliation of the person holding the seat (red=R, blue=D). The data for the map is hosted on a GIS server operated by the state. I am *assuming* the data is current.

To change the map so it shows the Indiana state senate districts:

  1. Click the basemap button (Next to the “Menu” button)

  2. Look under the “Overlay” heading (mobile users scroll down)

  3. Click the house layers to turn them off

  4. Click the senate “fill” layer and then the senate “boundary” layer.

Seemed like the kind of thing that might interest readers of this site.

HB 1126 – School Board Member Training

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Rep. Davisson has introduced HB 1126 mandating training of school board members. It requires the Department of Education to develop or compile a school board training course in conjunction with the Department of Local Government Finance and the Indiana Education Employment Relations Board (IEERB). The course is required to cover legal and financial issues that affect schools, personnel issues including teacher licensing and collective bargaining, student discipline issues, “how to access academic and financial information related to school corporations that is maintained by the department,” and sources of funding available to school corporations.

I will not dispute that new school board members could use training on these issues. When I joined our local school board, my background made me a bit of a freak – legislative junkie & legal adviser to municipal government. But even with that background I had some pretty significant blind spots – I had no idea that IEERB was even a thing. As a practical matter, my primary concern is what this training will look like and what sorts of biases will be built in. My experience with state government is that usually the front line people who would compile this sort of training aren’t going to get ideological. If anything, they’ll err on the side of quoting Indiana Code cites and the like without providing the kind of simplified narrative that – while helpful to understanding – also lends itself to more editorializing. But, education policy has been so hotly contested over the last 10 – 20 years that I’m reflexively skeptical of just about any education proposal. This one might be o.k.

As a legal matter, I think this legislation does have a significant omission: it does not say what happens to the school board members if they don’t complete the training. It doesn’t say whether they’re off the board, whether they’re unable to vote, whether measures that pass with their vote are void, or what the consequence of not taking the training might be. This was an occasional source of frustration when I was drafting legislation – sometimes it was tough to get policymakers to commit to an enforcement mechanism.

 

HB 1107 – State Fair Board Officer Elections

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Rep. Lehe has introduced HB 1107 which provides for State Fair board officer elections to be conducted by secret ballot. I confess to not knowing much about the State Fair operation, but as I read IC 15-13-5, the board consists of 17 members: the governor, the director of the state department of agriculture, the director of the Purdue Extension service, seven governor appointees, and seven members elected from each of the districts set out by IC 15-13-1-10.

The presiding officer of the board is required to be one of the seven elected members. This legislation requires that the election be by secret ballot. I have to think that there is a pretty good story underlying the legislation.

HJR 1 – Reducing Minimum Age for Legislators

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Rep. Chyung has introduced HJR 1 which would amend the Indiana Constitution to reduce the minimum age of state legislators to 18 years old. Currently, pursuant to Art. 4, sec. 7 of the Indiana Constitution, Representatives have to be 21 and Senators have to be 25. It also amends the gender-specific language in the Constitution which assumes that legislators will necessarily be male. (I think that’s the type of thing that the Legislative Services Agency does as a matter of course when old language comes up for amendment.)

SB 235 – Teacher Salary Increase Grant Fund

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Sen. Alting has introduced SB 235 which redirects sports wagering revenue from the general fund to a teacher salary increase grant fund. To be eligible for a grant, a school corporation has to provide verification that it has raised full-time teacher salaries by at least 2% in the upcoming contract year at the time the school is applying for the grant. Grant money can be used only for the purpose of funding increases in the salaries to full-time classroom teachers. According to the fiscal note, the revenue from sports wagering is anticipated to be $11.5 million for fiscal year 2021. The Department of Education would be responsible for administering the grant program and setting rules about the amounts awarded and the criteria for grant applicants.