Wednesday, June 13, 2012

Council Tackles Tough Issues

The priorities of our Indianapolis City-County Council in recent years have been skewed in favor of the ruling downtown elites. It's motto could be summed up as "what's good for downtown, is good for all." Last night, a meeting of the council's Rules & Public Policy Committee tackled a couple of tough issues that take a much broader view of what serves the public's interest. One measure focused on fairness for workers in the City's hospitality industry, while the second measure focused on providing equality in employee benefits for city and county workers.

Perhaps no other city in America has done more to subsidize the hospitality industry than Indianapolis over the past few decades. Indianapolis levies some of the highest hotel, food and beverage taxes in the country and then plows most of that money back into development and promotional efforts intended to support the convention center and professional sports franchises that help feed the hospitality industry. Proposal No. 179, offered by Councilor Brian Mahern, addresses a serious problem that has arisen as an increasing number of hotels outsource their staffing needs to temporary staffing companies.

According to testimony offered by a number of hotel workers placed in their jobs by temporary staffing companies, the contracts the hotels sign with staffing companies often prohibit the hotels from hiring directly the employees furnished by the temporary staffing companies. The wages paid to these workers typically is below the living wage and are jobs that offer no benefits, a problem which is exacerbated when the employees are not provided enough hours to earn a sustainable income at the hotel at which the staffing company contracts their services. These workers find themselves trapped by the staffing company's contract with the hotels since they are barred from seeking additional employment opportunities with other hotels to earn additional pay. Councilor Mahern likened their predicament to that of indentured servants. Proposal 179 would prohibit Indianapolis hotels from being "a party to any agreement that prevents [the hotel] from hiring employees of any contracting service at the hotel."

Jim Dora, a former member of the Capital Improvements Board whose family owns several hotels in Indianapolis, spoke in opposition to Proposal 179 on behalf of the City's hotel industry. When pressed by council members to explain how the proposed ordinance would be harmful to the hotel industry, Dora stumbled badly in trying to offer a plausible rationale beyond the notion that it imposed unnecessary government regulation and red tape. Dora professed ignorance of the content of the provisions contained in the contracts with the staffing companies, although he admitted that his hotels entered into them and that he had reviewed them in the past. He admitted that he had not even sat down with his own employees to discuss their issues with the restrictive nature of the staffing company's contracts with the hotels. Some council members questioned why he was advocating a position that only clearly benefited the staffing companies and not the hotels. Dora tried to shift the focus of the discussion to the amount of taxes paid by the hotels, which are actually only collected by the hotels; it's the patrons of the hotels who actually pay the hotel taxes. Councilor Mahern reminded Dora that money collected from those taxes are plowed back into promoting the hospitality industry and, in some cases, subsidizing room rates charged to attendees of conventions hosted at the Indiana Convention Center. Dora shot back at Mahern that only a handful of the downtown hotels benefit from the subsidized room rates.

Many hotel workers in attendance at the meeting were audibly expressing their disapproval and disagreement with Dora's testimony as councilors continued to pepper him with tough questions. At one point, Councilor Angela Mansfield came to Dora's defense and asked councilors not to show disrespect to Dora or others like him who take time to come before the council to testify on matters under public debate. It didn't appear to me that anyone was being disrespectful to Dora; they were asking him legitimate questions that challenged the position of his industry and were simply reacting with amazement to the incredulous responses he was providing to the questions asked of him. I'm generally supportive of freedom of contract, but when the aim of the contract is to limit meaningful employment opportunities for workers, perhaps government intervention is warranted to level the playing field. Democrats on the committee advanced the proposal to the full council over the opposition of the minority Republican members.

A second proposal taken up by the Rules & Public Policy Committee last night concerning domestic partner benefits, Proposal No. 213, enjoyed bipartisan support. Councilor Angela Mansfield is sponsoring the proposal, along with Republican Councilors Bob Lutz and Ben Hunter. Essentially, Proposal No. 213 treats all city and county workers equally with respect to their benefits regardless of their marital status or sexual orientation. Employees who have entered into a domestic partnership with either a member of the same sex or the opposite sex will be entitled to obtain the same benefits for their partners that are currently only available to the spouses of married employees. The committee heard testimony in support of the proposal from a diverse group of witnesses, including a representative of Eli Lilly, which has offered similar benefits to its employees worldwide for the past decade, a physician representing the Indiana State Medical Association, the Fraternal Order of Police and Indiana Equality, an LGBT rights organization.

The proposal drew weak opposition from the Indiana Family Institute's Ryan McCann and a constituent of Councilor Ginny Cain, who has made very public comments of her disapproval of anyone who engages in "a homosexual lifestyle" as she puts it. McCann suggested the domestic benefits partner law would be abused because it would allow anyone living with a person of the same sex to claim the benefits as a domestic partner. He testified that he has lived with other males in the past and that under his reading of the ordinance, if one of his roommates worked for the city or county, he would have been eligible for domestic partner benefits. The proposal requires such persons to sign a declaration that they have entered into a "domestic partnership," which is defined as "two adults who have chosen to share one another's lives in an intimate and committed relationship of mutual caring, who have shared a residence for at least 365 days, and who have agreed to be jointly responsible for basic living expenses." Presumably, McCann wasn't suggesting he was in "an intimate and committed relationship" with any of his male roommates. McCann also cited the debate over Just Cookies' refusal to sell rainbow-colored cupcakes to a gay organization and the threat of action against the company, which leased space in the city-owned City Market, for violating the city's human rights ordinance as a reason councilors should pause before passing domestic partner benefits.

The fiscal impact of the proposed ordinance is expected to be very minimal, perhaps no more than $500,000 annually. According to Eli Lilly's representative, fewer than 1% of the company's employees take advantage of the domestic partner benefits. The city of Columbus, Ohio, which enacted similar benefits for its similar employees in 2010, has similarly experienced a very small percentage of its employees who take advantage of the benefit. One of the reasons that few employees avail themselves of domestic partner benefits is because an unmarried employee is taxed for the value of health care benefits claimed for the benefit of his or partner unlike the benefit extended to the spouses of married employees, which are not taxed. The unmarried employee can offset the tax hit by claiming his or her partner as a dependent, but the test for dependency is difficult to meet under federal tax law. To qualify, the employee must be providing more than half of the non-employee partner's support.

Mayor Ballard has indicated that he will sign the proposal if it makes it to his desk. The committee held up a final vote on the measure, however, until the administration has had more time to study the current language provided in Proposal No. 213.

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