For a legislative session that opened with such promise for the tech community, a couple of initiatives look to be staring death in the face.
The first, a training tax credit for companies investing in the development of their employees, can no longer be found in any active bills. But not all is lost. Legislators still have time to pour more funding into the Skills Enhancement Fund. Instead of a tax credit, SEF is an actual cash grant that reimburses businesses one-half of their training expenses.
Indiana has a huge workforce gap in the tech community. My firm alone has had more tech clients than we can count looking to fill positions but not enough viable candidates to fill them. SEF has made a tremendous difference in helping them solve this challenge. But with SEF cash in perpetual short supply, its impact is limited.
As the current House budget stands, SEF funding is unfortunately flat through the next budget cycle. If this budget holds course, it truly will be a missed opportunity.
Then comes the matter of making the VCI tax credit transferable. The good news here is that this language still exists in active legislation. But again, its fate is uncertain as some wary legislators have bristled at the idea of making credits salable.
And there has been almost no traction in making VCI a refundable credit – i.e., convertible into cash. This step would be an even bigger game-changer than making VCI transferable.
For all of the strides Indiana has made in the tech sector, there is still much work to do. The Indiana tech community is not yet one of the cool kids when it comes to out-of-state investors or would-be employees, and it can still be an incredibly difficult environment to raise capital. Many investors see the Hoosier state as flyover country and ask the question, “Why Indiana?” What’s more, the workforce pipeline here has not reached a critical mass.
Meanwhile, every metropolitan area in the country is competing madly for the same tech companies and same jobs. Many of these communities have better tech infrastructure and other quality-of-life assets – those showy oceans and mountains – that put them at an advantage over Indiana. So Indiana is in no position to rest on its laurels.
Of course, tech’s priorities don’t live in a vacuum. Varied and legitimate other industries and initiatives seek funding. Infrastructure must be addressed, as does pre-K education and other pressing needs. But what differentiates SEF and VCI is that both go to the core of two consensus-building issues: workforce and promoting a high-wage industry.
Workforce is on the shortest of every legislative to-do shortlist. Indiana has a gaping workforce capacity hole in various industries, but especially in the tech sector. The brain drain is not an urban myth; it is real. And Indiana can be a difficult sell when recruiting candidates from other parts of the country who haven’t seen Indiana’s virtues up close and firsthand.
SEF can serve as a pivotal equalizer. By providing matching funds to employers recruiting and retaining employees with skill-enhancing training, SEF becomes an arrow in the quiver of tech companies looking for ways to build a world-class workforce. What’s more, the simplicity and efficiency of the program and its rich track record make it the envy of lessor training initiatives in other states.
The kicker in making VCI transferable or refundable is even more jarring: It doesn’t require any additional funding from the legislature. The program is already in place and fully funded. It simply takes adding two words: “transferable” and “refundable.”
Despite the great strides this state has made (the Salesforce announcement continues to be a big, big deal), it has to maintain the Little-Engine-that-Could attitude that has put it on the map. Such an effort includes engagement from all critical parties.
That includes you, legislators. The Indiana General Assembly can’t pass laws creating mountains or oceans, but it still has time this session to make Indiana a better, more competitive place for tech to do business.
Tim Cook is chief executive officer of KSM Location Advisors.