Lawmakers split over Indiana state budget

[Broke]

Lawmakers split over Indiana state budget

April 22, 2009 01:08 PM EDT







Indianapolis - A panel of Indiana lawmakers say they're confident they can reach a compromise on a new state budget, but key differences exist in plans backed by House Democrats and Senate Republicans.
A House-Senate conference committee discussed their proposals publicly on Wednesday, a week before the April 29 deadline for the legislative session to end.

Democrats who control the House say they still prefer passing only a one-year budget. They say uncertainties over the recession and its hit on state revenues make it impractical to adopt a traditional two-year budget.

Republicans who rule the Senate want to pass a two-year budget, saying a one-year plan will tempt the General Assembly to spend more than it should. As usual, serious negotiations are likely to take place in private.

"We are up over 350,000 Hoosiers unemployed. Being unemployed means we can anticipate a reduction in the number one and two revenue drivers, sales and income tax. That is a logical assumption that we can make," said Rep. Bill Crawford (D-Indianapolis).

"We need to set the tone for people. Indiana is in good fiscal condition going into this crisis. We plan to be in good fiscal condition coming out of this crisis. Meanwhile we have a plan that says here is how we are going to protect jobs, here is how we will protect education and give the public confidence they have the leadership to give them what they are trying to accomplish," said Sen. Luke Kenley (R-Noblesville).

There are some real differences on the school funding formula but there seems to be a spirit of cooperation to try to work things out. Lawmakers have one week to do that.

[still broke]

www.wthr.com/global/story.asp?s=10243358

Kevin Rader/Eyewitness News

Indianapolis - Governor Mitch Daniels says the budget and unemployment insurance are the two most important issues confronting lawmakers with four days left in this legislation session.

In a letter Friday, the governor also addressed the threat of a special session, saying, "I am as eager as all the members I talk to that the session end on time. Special sessions were once common, but despite annual predictions Indiana has not needed one during the last four years. One way a governor can help prevent a special session is to avoid surprises, by being clear about what is and is not acceptable. Another is to be reasonable and flexible about details."

Another looming problem facing lawmakers is funding the Capital Improvement Board's $47 million deficit. The CIB runs the sports stadiums downtown including Lucas Oil Stadium, and on Thursday the Indianapolis Colts released a letter explaining their investments in the community. Some lawmakers have called for the Colts and the Pacers to contribute $5 million each to a plan to plug the CIB deficit, but so far the teams have not committed to that proposal.

A day after issuing the two-page open letter to their fans stating they did not ask for a new stadium, Colts President Bill Polian reiterated the point.

"We did not go to the city and hold them hostage as has been stated. As a matter of fact the city came to us," Polian said.

"It is not the way I understood it, but I was not party to any of that. It was discussions between the city and the team," Daniels said.

But the governor did intercede to quarterback the bill through the legislature after it stalled and Friday he said all parties must play a role in helping address the CIB's projected revenue shortfall.

"I say all parties and that certainly includes both teams," the governor said.
Daniels was asked what he thought about the Colts' statement.

"When circumstances change you have to make adjustments," Daniels said. "It's true with budgets and it is certainly true with issues like the CIB and I would just hope all parties will take a constructive role. Everyone will have to play a role, just as in budgeting, just as in unemployment insurance for that matter. I say all parties and that certainly includes both teams."

"I think there ought to be some tools for self help and the City-County Council should be willing to do that and he should be leading the way to overcome the extreme high cost of Lucas Oil since he took over control of that," said House Speaker Pat Bauer (D). When asked what he thought of the Colts' letter, Bauer responded, "Not much."

But Bauer added since the governor, the city-county council and the mayor are not on the same page, he is not surprised the CIB bailout is faltering.

"To me this crisis is all about the convention business," Mayor Greg Ballard.

Testifying before the legislative conference committee Friday, Ballard asked lawmakers to give him as wide a variety of taxing options to take back to the city-county council as possible and he reaffirmed his belief that the sports franchises should participate.

"I am a little concerned about all the demonizing of the teams that is going on. I think that is counter-productive, actually, and I would like that to stop. It is not representative of how Indianapolis does business," Ballard said.

"We are very happy to continue to honor the lease we signed four years ago with the city and the state," said Polian.

Polian says discussions are ongoing. When asked if the sports franchises would decline to participate financially, Daniels said, "In that case, I would say they should search their conscience."

Daniels' letter goes on to say: "Speaker Bauer said to me this week that there are really just two items that must be achieved before adjournment. One is a fair overhaul of the state's out-of-balance unemployment insurance system. The other is a budget that protects vital services and taxpayers both now and in the future.

As of now, neither the House nor the Senate proposals meet that test. I'm not finding fault or criticizing anyone; it's just that both budgets were built on revenue assumptions that turn out to be way off. To illustrate, the shortfall part way through April is already larger than the Senate budget assumes through the end of June. A budget that ignores reality will spend money we won't have, quickly devour our rainy day funds, and force tax increases and massive service cutbacks like those going on in other states.

With $4 billion of federal stimulus dollars added in, Indiana will see record public spending the next two years under any state budget. Let's work together to see that Hoosier workers and taxpayers are protected during this cycle and beyond."

www.in.gov/gov/files/Press/042409_cliff.pdf