A Citizen's Guide to Indiana

Masson's Blog

New Plan for Insolvent Unemployment Insurance Fund

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Eric Bradner continues his excellent reporting on legislative efforts to deal with the insolvent unemployment insurance fund. The fund is currently borrowing huge gobs of cash from the federal government, undermining the mythology of a certain federal government disdaining, budget balancing Governor. I hasten to add that the UI fund’s financial problems are not of the Governor’s making; but they also sure are not anything he’s done much to solve.

See some background here and here. In 2009, the Democratic House and the Republican Senate passed a compromise measure that raised taxes on business and cut benefits to the unemployed. In 2010, the General Assembly voted to stall implementation of that compromise. And, this year, with the political landscape changed to give the G.O.P. firm control of Indiana government, a bill is moving forward that will increase the burden on workers receiving money from the unemployment fund and decrease it (though not entirely) on business.

Pensions

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The Urbanophile has a good post on crisis being a time when there is opportunity for government reform. I recommend reading the entire thing – has some kind words for Gov. Daniels. But, what caught my eye was when he touched on the issue of pensions. He’s right that pensions are a huge unfunded liability, and he suggests that now might be the time for reforming how we deal with them. But, I wasn’t entirely clear from reading if and how he might be proposing we deal with the pensions that are already owed. But, he mentioned some facts that – in my mind- argue against messing with the pensions that are already owed:

Today, once you’ve got X number of years in, you are almost handcuffed to your government job for the duration even if you hate it because the value of that [defined benefit] pension is so high. That’s why you always face a battalion of surly employees when you go to renew your driver’s license. Also, it creates a recruitment issue. Lots of people might want to spend some time in public service without making it a career, but it can be hard to do. In many places (though by no means everywhere), government pay is below market on a cash basis, with the balance made up (often more than made up) by generous pensions. So for someone who might want to spend say 3-7 years in government, that’s a huge disincentive. They would be paid below market and not get the pension. If they were paid market and had a 401(k) they could take with them, that’s a lot more attractive option.

So, the people already in the system have made that trade. They have, literally, traded their lives based on this promise. Instead of doing other things with their lives, they spent hour after hour, day after day, doing a job in public service when they, perhaps, could have been doing something with their life that they loved better and/or that paid better. Perhaps the rationale was that, with a defined benefit pension, they could securely retire sooner – possibly to spend their time on things they enjoy or working in some other capacity and making up the income they lost. To pull the rug out from under them after they held up their end of the bargain strikes me as immoral.

That said, it is a big funding problem. But, it probably goes without saying that I don’t view stiffing creditors as a great way to deal with your funding shortfalls, particularly when those creditors are employees (or former employees) who are owed for time spent in your service.

HB 1154 – Tax Exempt Treatment for Health Care Sharing Ministries

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HB 1154 introduced by Rep. Koch defines the concept of a “health care sharing ministry” and gives it certain tax advantages.

A health care sharing ministry: 1) consists only of people who share similar & sincerely held religious beliefs; 2) is a 501(c)(3) organization;
3) facilitates the matching of people who have financial or medical needs with other people who have the present ability to assist those needy people – financing one through the donations of the other; 4) provides for contributions that don’t require contributors to assume risk or continue to promise to pay; 5) provides a monthly statement that shows the total amount of donations and the amount actually provided for medical assistance; and includes a statement with specified language that disclaims any notion that the organization is an insurance company or that payment of medical bills by the organization is anything other than voluntary.

It excludes from income for tax purposes any money an individual receives from a health care sharing ministry or any money paid by an employer on the individual’s behalf to the ministry or “because the individual is a participant of a health care sharing ministry.”

I’ve never really gotten the tax exempt status for religious entities – as a practical matter, any way. As a historical matter, I understand how things came about. If they’re doing good works, we should exempt the funding that goes toward those operations, regardless of philosophy. If they’re not doing good works, then they shouldn’t get tax exemptions regardless of their religious doctrine or other philosophy. Same goes here – if folks want to donate to provide medical assistance to others, great. I have no problem with making such donations tax exempt. But making the exemption contingent on the organization subscribing to a religious doctrine of some sort makes no sense to me.

Guns!

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A number of firearm related bills have been introduced in this session of the General Assembly. Oddly, where firearms are concerned, these lawmakers mostly seem to think we need to be softer on crime, need less local control, and more litigation. And, above all, we need guns in more places. I’d be interested to see a vote on a bill that requires guns to be included in every Happy Meal, just to see if anyone voted for it. Anyway:

SB 94 introduced by Sen. Holdman repeals a law permitting residents of Ohio, Kentucky, Illinois, and Michigan to purchase guns in Indiana and vice versa. It was something that was once required under federal gun laws to purchase weapons in contiguous states, but amendments to the federal law have made this one obsolete.

SB 131, introduced by Sen. Randolph allows an employer at property that contains an oil refinery to prohibit employee possession of a firearm.

SB 147 introduced by Sen. Steele allows possession of a handgun without a license at a shooting range or if it is unloaded and being transported between a residence or fixed place of business and a shooting range.

SB 154 introduced by Sen. Steele allows a person to carry a loaded and operational firearm while operating an off-road vehicle or snowmobile if: (1) the firearm is a handgun and the person has been issued an unlimited handgun license; (2) the firearm is a handgun and the person is not required to possess a license to carry a handgun; or (3) the person is operating the vehicle on property that the person owns, has a contractual interest in, legally possesses, or has permission from the owner to possess a firearm on.

SB 291, introduced by Sen. Tomes, provides that firearms manufactured in Indiana substantially without any materials imported from outside of the state are not subject to federal gun laws, including registration requirements, under the federal government’s commerce clause authority.

SB 292, also introduced by Sen. Tomes, and HB 1540, introduced by Rep. Speedy both prohibit local regulation of firearms and provides a cause of action against local governments that try to do so. (So, reading this in conjunction with SB 291, I gather Sen. Tomes thinks federal and local governments can’t be trusted with gun regulation. Somehow the middle ground of state government is ideal.)

SB 319, introduced by Sen. Banks, reduces the penalty for carrying a firearm on school property from a felony to a misdemeanor. Permits firearm possession on school property by non-students otherwise legally entitled to possess firearms if the weapon is locked in the person’s car.

SB 411, introduced by Sen. Nugent and HB 1355 introduced by Rep. Eberhart both allow individuals to sue employers or potential employers who condition employment on disclosure of whether the person owns firearms or ammunition or on an agreement to forgo a legal right to own a firearm or ammunition. Punitive damages would be permitted against the employer and, in the case of government employers, the normal tort claim immunities would not apply.

SB 434 introduced by Sen Hume provides that after June 30, 2011: (1) a retail handgun dealer’s license is valid for six years from the date the license is issued instead of two years; and (2) the fee to obtain the license is $60 instead of $20.

SB 506, introduced by Sen. Tomes and HB 1546, introduced by Rep. Van Natter, both allow a person to possess a handgun without a license if: (1) the person is on the person’s own property or vehicle (or legally controlled by the person); (2) the person is lawfully present on someone else’s property or in someone else’s vehicle; (3) the person is carrying the handgun at a shooting range, while attending a firearms instructional course, or while engaged in a legal hunting activity; or (4) the handgun is unloaded and securely wrapped.

SB 567, introduced by Sen. Mrvan, provides that people serving sentences for crimes committed using a firearm do not earn credit time. (Typically an inmate will, with good behavior, get credit for 2 days on their sentence for every day actually spent incarcerated.)

HB 1582 – Health Care Service Prices

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Rep. VanNatter has introduced HB 1582 which would require health care service provider to disclose certain pricing information for services.

It doesn’t look particularly workable in the form it’s in, but the legislation would essentially require health care service provider’s (I believe this means, for the most part, hospitals and clinics) to provide a price list to physicians who refer patients. Physicians, in turn, are responsible for providing patients with a price for a service they prescribe as well as a list of various providers of the service and a notice that prices may vary considerably for the same service. Additionally, there are requirements that insurers and HMOs publish the reimbursement amounts they’ll provide for various services.

It’s a laudable goal to have price transparency. All the happy talk about market forces in health care is mostly nonsense without that kind of transparency. I don’t know how well the average consumer can comparison shop in any case, but with health care’s opaque pricing structures it’s 10x as hard.

This is aside from the fact that a person who needs health care is under duress – negotiating for a heart transplant is not unlike negotiating with a gun to your head; both are a matter of life & death. And, a market approach assumes the consumer knows enough about the product to make an informed bargain; which is also problematic. But, none of it can work without readily available information about the prices.

Rep. Young Urges Congress to Repeal Health Care Reform and Look Into Beginning to Explore Thinking About New Health Care Reform Options

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Hoosier Access posted a statement by Rep. Todd Young on voting to repeal the recent Health Care reform law. Rep. Young apparently recognizes that repealing the reform necessarily means continuing on with the status quo of the current health care and insurance system, which is generally about as popular as a rabid dog. He attempts to soften the reality what repealing the reform bill means by saying:

That’s why I also plan to vote today for a resolution instructing Congress to begin exploring new options; options to ensure high-quality and lost-cost health care for all Americans.

Such a resolution sounds about as useful as writing blog post. If they have concrete alternatives, they should put those in the repeal legislation to take effect at the same time as the repeal. Otherwise, it’s just so much sound and fury and, ultimately, a vote for the status quo ante.

U.S. Recovery Features Fewer Jobs Than Other Countries

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David Leonhart has a good column in the New York Times discussing how the economic recovery in the United States compares to that taking place in other countries. Other countries’ recovery tends to feature corporate profits that are still lagging but with much less unemployment. By contrast, here corporate profits have improved 12% over 2007 level but we remain mired in high unemployment.

There is a good argument to be made that critics of government policy are right – Obama and the Democrats have not been sufficiently focused on jobs; but it’s not because they’re unfriendly to business, but because they’re too friendly to corporate interests.

The gross domestic product here — the total value of all goods and services — has recovered from the recession better than in Britain, Germany, Japan or Russia. Yet a greatly shrunken group of American workers, working harder and more efficiently, is producing these goods and services.

The unemployment rate is higher in this country than in Britain or Russia and much higher than in Germany or Japan, according to a study of worldwide job markets that Gallup will release on Wednesday. The American jobless rate is also higher than China’s, Gallup found. The European countries with worse unemployment than the United States tend to be those still mired in crisis, like Greece, Ireland and Spain.

The column makes passing mention of the nation’s disability system. It’s one of those things in which I’ve taken an interest without doing much research. My knowledge of the Social Security Disability program comes from questioning debtors about their income and assets. A non-trivial number of them tell me they’re in the process of applying for disability. Obviously, I’m not privy to their medical records, but a fair number of these look able bodied and sound enough of mind to me. And the process takes an extremely long time. The backlog is measured in terms of years, I’m told. Leonhart has this to say:

Reforming the disability insurance system so it does not encourage long-term joblessness would help. “Once people enter the system,” as Mr. Katz of Harvard says, “they basically never come back.”

A disability check doesn’t mean riches, but it’s a steady check and, for a lot of folks, it beats working. The system needs to be quicker to discard the deadbeats, quicker to care for those clearly in need, and better at following up to determine if continued support is necessary. Whether that’s at all feasible, I don’t know.

Martin Luther King, Jr.

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When I think of progress in race relations in the United States, I think of Abraham Lincoln and Dr. Martin Luther King, Jr. Both were murdered for their trouble. I’ve heard Slavery called America’s Original Sin and Abraham Lincoln its Christ-figure. But, Lincoln was no son of God, so I guess it took Dr. King’s death and might well take a few others before we’re rid of the taint. There always seems to be a Bull Connor or George Wallace available for the part of the Enemy and the odd John Wilkes Booth or James Earl Ray available as trigger-men.

HB 1307 – Parent Service at Schools

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HB 1307 introduced by Rep. Lawson requires school rules against bullying include a provision requiring a student’s parents to provide at least three hours of service each semester or quarter.

The discipline rules described in subsection (a) concerning parental involvement must include a requirement that a student’s parent provide at least three (3) hours of service each semester or each quarter, if applicable, at the student’s school.

This bill raises all kinds of questions. First, it’s not at all clear whether the bill requires service only of kids involved with bullying. As I read it, the rules would apply to all students as a kind of hedge against bullying in the first place. Second, which is it? Three hours per semester or per quarter? Parents are going to be required to serve 12 hours or 6 hours per school year based on how the school happens to break up its year? Third, does this mean each parent of a student or one parent per student? Step-parents? How is this going to be enforced? Would it be considered a taking without compensation under the 5th & 14th amendments? How about involuntary servitude under the 13th?

SB 324 – Loser Pays Legal Costs

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Sen. Banks has introduced SB 324 which would require a court to order payment of legal fees by the losing party to litigation. (Current law permits a court to order such fees where the losing party’s claim was frivolous. As a practical matter, it’s fairly rare for courts to order payment of such fees.)

The legislation has an interesting drafting provision that (so far as I know) was not permissible when I was drafting at Legislative Services:

The legislative services agency shall prepare legislation for introduction in the 2012 regular session of the general assembly to organize and correct statutes affected by this act.

I don’t know the rationale in this particular case, but my understanding of this sort of provision is that it’s usually included where the concept of a bill is reasonably simple but its implementation is going to kill a lot of trees by requiring alteration of a lot of code citations. Just to make a frivolous example, let’s say someone wanted to propose changing the title of “governor” to “supreme overlord.” The concept is fairly simple, but a bill to make it happen would be thousands of pages long as you pulled every code citation with the word “governor,” and changed it to “supreme overlord.” Better to see if anyone is interested before preparing a document that long. In this case, however, I’m not sure what sort of conforming legislation would be necessary, and its inclusion makes it look a little like legislators are being asked to buy a pig in a poke. “We’ll tell you what you voted for later.”

But, back to the premise itself. I certainly understand the frustration that can come with defending yourself against a case that’s too weak to prevail, but too strong to get dismissed quickly. I have one case in particular right now that (in my mind) fits this description perfectly. I’d love to be able to get a legal fee award for my clients.

As a practical matter, however, I think it would create an environment in which only the very rich and the very poor would be inclined to pursue their legal claims. The very rich could afford to take the hit for legal fees if their claim was ultimately unsuccessful. The very poor could also afford the risk – if you’ve got nothin’, you got nothin’ to lose. It’s those in the middle who would have to let others roll over their legal rights rather than risk drawing a bad jury and adding the other guy’s legal fees to their injuries. If there is a solution, I think it would involve a more permissive test for judges to use when determining whether a legal claim was frivolous. And, if the “loser pays” bill were to pass, I’d probably suggest that attorneys make clear to their clients, that the client is the one obligated to pay the bill. If you can collect from the loser after the litigation, super, but I wouldn’t want my fee to depend on whether I could collect from the opposing party. (Though, I can foresee a whole new arena of collections law cropping up from this.)