While this legislative session has been disappointing for advocates of mass transit (though the fight continues), the General Assembly can still take an important action to help Indiana's transportation sector: Approving Senate Bill 321, a tax incentive to encourage our state's logistics companies to invest in private infrastructure to help move freight to, from, and across Indiana more efficiently. David Holt, Vice-President of our Conexus initiative, describes the proposal in this column published on Inside Indiana Business:
Logistics tax credit a super-size boost to Indiana’s economy
Last week, more than 150,000 visitors descended on Central Indiana for Super Bowl XLVI, one of the biggest sporting events in the world. Thousands upon thousands of people packed the streets of Indianapolis, transforming the state capitol into the capitol of football fandom.
Indy drew rave reviews for how it handled the influx with hospitality and aplomb. But this shouldn’t be surprising – after all, organizing and managing the flood of fans is really an exercise in logistics. And Hoosiers know logistics.
Think of it this way: Take every single Super Bowl visitor in Indianapolis last week, and replace each of them with over 12 million pounds of freight, piled higher than the city’s skyline. That gives you a sense of the volume of manufactured goods, agricultural products, steel and other materials that are shipped to, from and through Indiana every year – nearly a billion tons.
It adds up to big business. Indiana’s logistics sector is a $10 billion industry that employs 300,000 Hoosiers. By moving products efficiently across the country and around the world, logistics also makes our manufacturing sector work. ‘Crossroads of America’ is more than a marketing slogan for Indiana – it’s an economic fact.
State lawmakers recognized the importance and growth potential of our logistics industry last week, when the Indiana Senate passed SB321, the Transportation and Logistics Income Tax Credit (introduced by Senator Tom Wyss of Fort Wayne) by an overwhelming 49 to 1 vote.
SB 321 provides a 25% income tax credit for qualified expenditures made before January 1, 2019, by a taxpayer to make improvements to real property that is related to constructing a new or modernizing an existing transportation and logistics distribution facility and/or the transportation of goods on Indiana highways, rail, water and air. The legislation limits the credit to $10 million per fiscal year.
Indiana is fortunate that our central location puts two-thirds of the nation’s population and businesses within a day’s truck drive of our borders. But we also need world-class transportation infrastructure to maximize our geographic advantages. Through Governor Daniels’ Major Moves plan, Indiana has been able to continue to make aggressive investments in our public infrastructure even during the recent lean budget years. But it’s also important that we incentivize companies to invest in their privately-held infrastructure, encouraging expansion and growing our overall capacity to move freight.
This is the goal of the Transportation and Logistics Tax Credit, which now moves to the Indiana House of Representatives for consideration. The Conexus Indiana Logistics Council, representing the state’s major employers in transportation, distribution and supply chain operations, would like to express our gratitude to the Senate for acting to reinforce our logistics sector – and we respectfully call on the House of Representatives to do the same.
Nationally, the economy continues to lag behind expectations. Here in Indiana, we’ve been more fortunate than many in terms of output and job creation, because our economy is concentrated in what we might call ‘the basics’ – making and moving products. Even so, too many Hoosiers are still out of work, and too many of our employers are hesitant to grow. Encouraging our logistics industry to keep investing and contributing to a world-class transportation infrastructure is a wise investment in our economic recovery.
David Holt is Vice-President of Operations and Business Development for Conexus Indiana, the state’s manufacturing and logistics initiative; Holt manages the Conexus Indiana Logistics Council, an industry-led forum representing the interests of this sector.