May 11, 2011
Last week, during a business trip to Washington, DC, I devoted this blog to the historic news that Osama bin Laden had been felled by U.S. Special Forces. Simultaneously, I did have news to report from Indiana, but last week was not the time for local focus. This week is.
The long session of the 2011 Indiana General Assembly ended at approximately 11:30 p.m. on Friday, April 29. We had begun the session with optimism about the business-friendly, Republican control of the House, Senate and governorship; the reality was that we had to fight nonstop to prevent Gov. Daniels from usurping monies from the Public Deposit Insurance Fund (PDIF). We prevailed, thanks to energetic grassroots delivery from bankers and masterful strategy orchestrated by the IBA Government Relations Team.
There were other successes, too. Namely, a bill that would have allowed municipal bankruptcies died in the end. Also, the eventual immigration bill that passed was significantly watered down, with all of the provisions pointed at bankers taken out of the bill.
About the only victory we did not gain was a reduction in the Financial Institutions Tax (FIT). We had not entered the session expecting a decrease, but the corporation tax was reduced from 8.5 percent of pretax profits to 6.5 percent, phased in over time beginning in 2013. It seemed that banks were denied a decrease as “punishment” for not allowing the theft of PDIF dollars.
Banks have been taxed equally with corporations since 2002, when corporate taxes were increased to the FIT level, in response to elimination of the inventory tax. We will have a couple more bites at the apple in 2012 and 2013 to once again gain parity with all other businesses, and gain the benefit of a tax reduction for the FIT.
We will also be engaging in serious dialogue about how to move the PDIF from government management and control into an iron-clad trust controlled by those at risk, i.e. bankers. So even with the recent close of this session, we already face a heavy agenda for 2012. Thank you to all who have worked hard this session to promote the banking industry. We want to keep Indiana a business-friendly state, backed by a strong banking system!
– S. Joe DeHaven