A One Day Special Session (and More?) Preview

Today, the Indiana General Assembly reconvenes to pass five bills; four had been through the entire process during the regular session that ended on March 14 and were ready for final passage.

To use a basketball metaphor to describe the situation with these bills: The ball was still in the shooter’s hands when the shot clock went off. And the bills to be taken up in the special session will substantively be the same bills that were making their way down court in the final minutes of regulation. The only other bill is a technical corrections measure to reconcile inadvertent conflicts in language of bills that passed – i.e., two bills amending the same section of the code, but with slightly different wordage. Such technical corrections bills are routine.

As we reported last month, there are two tax administration bills. House Bill 1316 – the one to update Indiana with the federal tax reform changes – is both significant in effect and time sensitive. Failure to pass this legislation would greatly complicate 2018 returns and be of substantial consequence to Indiana and its taxpayers. Meanwhile, Senate Bill 242 includes a number of provisions the Indiana Department of Revenue sought to improve tax administration.

The remaining two bills are in the education realm: one addressing school safety issues and the other involving state oversight of financially distressed school systems – often regarded as the Muncie and Gary schools bill. There are lingering disagreements attached to the provisions of the latter legislation (testimony was heard earlier this week by the Legislative Council), and it will reignite debates that were had during the regular session. But it is expected that the time allotted for rehashing these debates will be limited.

Given the timeframe, there is little for legislators to do except formally act on the five bills. That leads us to the question: Will they in fact get all their work done in a single day? Probably so, once they suspend most of the rules that would, if applied, serve only to prolong the proceedings.

Separately, it appears there is some other significant business to be conducted by the Senate while they are all in town. Rumor has it that the following day (May 15) will be devoted to some serious internal politics. That would be the selection of a new Senate Pro Tempore to replace the retiring Sen. David Long (R-Fort Wayne). Talk is of a “binding straw poll” seeking to lock members into a statement of who they intend to support when a formal vote is taken in November, after the fall election. Senators Rod Bray (R-Martinsville) and Travis Holdman (R-Markle) are the acknowledged frontrunners for the Senate leadership post.

Final Takeaways on New State Budget

Great, we have a state budget for the next two years, but what’s to make of it?

Foremost, the budget sticks to Gov. Daniels’ request to maintain a $1 billion surplus in the state’s reserve funds.   According to Indiana Chamber tax lobbyist Bill Waltz, this prudent amount is significant and important for the state to stay on track financially.

“With the revenue stream being so incredibly uncertain in the coming months and the federal stimulus dollars that are built into the two-year budget going away in 2012, it is critical that we not just cross our fingers and simply hope for the revenue stream to return.  Because if the economy fails to rebound or falters only slightly longer than the revenue projections, we will be in a hole at the end of the budget cycle.

“And then the only way to avoid a tax increase of some kind would be to utilize the surplus balance as that final bridge out of the troubled economy. In other words, it is at that time – not now or next year – that we (the state of Indiana) may want to use those funds,” he explains.

Waltz also believes the budget strikes a good balance between “spending desires and reasonable fiscal constraint on many issues (not just in the education area).”

A number of positive provisions that fell by the wayside via the regular session budget collapse had better fortune this time around.  Among them, the bulk of what was House Bill 1447, an all-inclusive piece of tax legislation, and a multi-million-dollar financial rescue for Indianapolis’ Capital Improvement Board (CIB).

The CIB situation simply had to be dealt with, Waltz says.

“Many from outside the Central Indiana area are reluctant to acknowledge the economic contribution that the CIB facilities (the convention center, Lucas Oil Stadium, Conseco Fieldhouse and Victory Field) make to the state’s economic vitality and coffers. Indiana, not Indianapolis, could not afford to see these operations and the tax revenue that their attractions bring be put in jeopardy,” he asserts.

Indiana Chamber education lobbyist Derek Redelman believes the budget bill also produced one of the best sets of education reform in the state’s history.

Heading that list of accomplishments is the new K-12 school funding formula that gives greater focus to students, rather than school districts, than any previous budget of the last couple decades. 

“The bill also included a scholarship tax credit that will generate private donations to help low- and moderate-income families to attend the schools of their choice – while also saving money for the state.  It also eliminated a longstanding statute that had prohibited schools from using the results of state tests to evaluate teachers,” Redelman notes.

“This budget avoided caps and other controls on charter schools, despite a session-long full-court press by Indianapolis Public Schools, House Democrats, teacher unions, school administrators and other charter school opponents.  Plus, it will allow virtual charter schools to finally get started, after a two-year moratorium created by the 2007 state budget.” 

Correction: The budget passed the Republican-controlled Senate 34-16.  A total of 30 of the 33 Republicans voted for the bill and were joined by four Democrats (Hume, Young, Arnold and Mrvan). Republican no votes were from Leising, Delph and Becker.

Budget Approved; Shutdown Avoided

The 2009 special session is officially over — finally — with a two-year state budget passed by the General Assembly.

After a lengthy process that seemingly left few happy based on the floor speeches in both chambers, enough of a compromise was reached to send lawmakers home and avert a government shutdown. The Senate voted 34-16 in favor, with the House approving it 62-37.

All but one of the Republican senators (Jean Leising of Oldenburg voted no) were joined by Democrats Lindel Hume of Princeton and Richard Young of Milltown. The House support came from all 48 Republicans and 14 Democrats.

Governor Daniels’ statement: "Like any compromise, this budget has its defects, but it meets the fundamental condition I laid down in January and every day since: to limit total spending enough to preserve our surplus and thereby protect taxpayers against the tax increases happening in virtually every other state."

Update: The governor proceeded to sign the legislation.

Crunch Time: Action from House Floor

Mercifully, we’re nearing the end (hopefully).

Members of the House are currently taking turns on the floor voicing their opinions on the budget bill, which is expected to be voted on (relatively) soon.

Regarding the contents of this budget, Rep. Craig Fry (D-Mishawaka) says he’s embarrassed by it.  Rep. Vernon Smith (D-Gary) stated that Democrats were getting only “a teaspoon while Republicans walk away with a truckload.”  Still, not all Republicans were pleased.  Representative Mike Murphy (R-Indianapolis) voiced his concern that the budget didn’t do enough to help homegrown Hoosier companies, many of which he feared would be forced out of business.

Leading up to and including today, much of the wrangling centered on K-12 education – be it funding (districts vs. students), charter schools, the scholarship tax credit program or virtual schools. 

Indeed, Rep. Smith spent most of his floor time on this subject and denounced the education policies contained in the budget.  Like the vast majority of Democrats, Smith had wanted the K-12 dollars to continue to be awarded on a school district basis, while Republicans were adamant the money follow the students.  The problem with Smith’s argument: Large urban districts like Indianapolis and Gary continue to see declining enrollment.  To Rep. Smith, however, Gary is being “treated like a stepchild.”

Smith and many other D’s also still haven’t warmed to the idea of charter schools and see them – as well as the tax credits to allow for school choice – as a threat to traditional public schools. 

Meanwhile, Rep. Bob Behning (R-Indianapolis) pointed out that both the Gary and Indianapolis Public School (IPS) districts receive more funding per student than any other district in the state.  In fact, IPS gets nearly $2,300 more per student than the state average.

Later on, fiscal stalwart Rep. Jeff Espich (R-Uniondale) implored legislators to do the right thing and vote "yes" on the budget.  “We’ve all had our say; we’ve all had to compromise.  I think we’ve done the best we can do.  Anyone can find a reason to vote ‘no,’ but you can also find a reason to vote ‘yes’ … one reason being not having to raise taxes.”

Stay tuned for more …

Going Down to the Last Day … Again

A supposed budget agreement on April 29, the last day of the regular legislative session, fell apart when barely a quarter of the 100 House represenatives voted for it. Let’s hope for better results Tuesday, when all 150 legislators will cast their votes on a budget compromise and plan to help Indianapolis’ Capital Improvement Board.

Key legislators worked behind the scenes, Gov. Mitch Daniels offered his insights and legislative caucus meetings were undoubtedly interesting. But as the budget bill was being printed Monday,  House members called it a day. While there were rumors of a Senate vote to come yet tonight, Democrats there opted to go home.

No complaints with either of those decisions. Rushed votes, without a true understanding of what is in the legislation, would likely lead to an unfortunate outcome. The state can’t really afford that.

Few details are known at this point, other than the core of the agreement being the Republicans’ two-year plan instead of the Democrats’ one-year proposal. How far the compromises went on education funding and other key issues is yet to be seen.

The good news is there is a bill to vote on, a step many have doubted in recent days. The uncertain news is in the details of the hundreds of pages of the proposal and what legislators will do tomorrow. It’s not the last day of the special session then, but the final opportunity to avoid a state government shutdown.

Good luck to all! 

Indy Mayor Makes Case for CIB Funds

Indianapolis Mayor Greg Ballard made his plea today before members of the budget conference committee for over $45 million in funding to rescue the city’s Capital Improvement Board (CIB).

According to Ballard, the CIB has a “three to four-year hump to get over.  We’re at risk until that point.”

At risk are major sports events such as the Big Ten basketball tournaments, the men’s NCAA Final Four, the 2012 Super Bowl and the convention center expansion.

Representative Terry Goodin (D-Austin) asked the mayor if his “proposal would take care of the board’s deficit or is it just another Band-Aid” – with more dollars needed down the road.  Ballard replied, “I feel pretty comfortable with this going forward…I don’t want to come back (for more money) – nobody wants us to come back.”

Ballard pointed out several times the connection of CIB activities to the entire state, referencing that the majority (60%) of traffic to the downtown sports facilities, Circle Centre mall, etc. is from out of town.

Though overall sympathetic to the mayor’s predicament, some registered displeasure that one area of the state would receive such significant financial attention.

Representative Bill Crawford (D-Indianapolis): “One of the caveats I’ve stated all along is that I support this, but by my own calculations, I can count only 21 legislators representing Marion County – and that’s a problem.  Other areas of the state have problems too.”

Crawford also encouraged his fellow legislators to keep the Indianapolis Indians baseball team in mind when looking at the mayor’s proposed increase in the admission tax, which he said could adversely affect the most affordable sports option for families,

Representatives Dennis Avery (D-Evansville) and Eric Turner (R-Marion) raised questions over Ballard’s proposed $2 million increase in the Professional Sports Development Area (PSDA) from $8 million to $10 million.  These additional funds would come to the CIB via the retention of more funds – as opposed to going into the state coffers.  These two legislators were concerned with how this would look to other cities like Fort Wayne and Evansville with professional sports teams but already receiving significantly less funding. 

Meanwhile, Rep. Jeff Espich (R-Uniondale) worried that helping the CIB “would open it up for others to try to fix gaming and other issues elsewhere ….we will be doomed if that happens.”

One voice of reason in all of this was Sen. Lindel Hume (D-Princeton), who seemed to be tired of hearing that no one outside of Marion County truly cared about the CIB funding woes. 

“I live in rural Princeton and I care.  The CIB represents a significant investment in future revenue for Indiana,” he notes.  “If we don’t do something, Circle Centre (mall) will close; we will lose dollars.  If we don’t do something, the conventions will leave; we will lose dollars.  This is as important as a large manufacturer to the state.”

But perhaps Rep. Cherrish Pryor (D-Indianapolis) made the best case for providing the CIB with the requested money.  “The state receives a much greater amount in return – roughly half a billion dollars – than what CIB is asking us for.”

It would appear then that some common ground must be reached and CIB funding included in the state budget, despite the shortness of time. (Crawford noted a bill must be printed by Sunday to present to the House.)

At Least They’re Not Messing with the Days on Task

Education funding is always a contentious issue at the Statehouse, but the battle is rising to a new level this time around (as we have heard over and over and over). Past disagreements largely centered on the level of spending increases. With fewer dollars available, it’s a case of where are they going to go — to students or districts.

The budget is filled with education measures beyond the funding fight. One issue thankfully not on the table, at least for now, is minimizing the 180-day school year. Chamber education expert Derek Redelman reported it this way following the end of the regular session.

In recent months, we have heard from a new president, from a new secretary of education, from a film comparing Carmel students to those in India and China (see here) and from multiple other sources that American students spent far too little time in school. So it was a bit shocking to see at least six different bills filed this year that would have allowed Indiana’s school year to be shortened.

The Chamber fought these bills vigourously and most never even got a hearing. The one bill that did get a hearing was talked about by House Education Chairman Greg Porter (D-Indianapolis), who acknowledged that a reduced school year would be most harmful to the low-income students he represents.

Things all changed when Superintendent of Public Instruction Tony Bennett announced mid-session that the Indiana Department of Education would enforce current law and would no longer allow schools to count parent-teacher conferences and professional development days as student instructional time. He also announced much less flexibility in the waiver of inclement weather days. It was a decision backed by 20 years of Indiana law and one the Indiana Chamber applauded loudly, but it was also widely criticized by House Democrats, who vowed to block it through legislation. Though Rep. Porter offered the legislation intended to accomplish that goal, it ultimately failed.

K-12 Funding Crucial in Budget Debate

Money money money money MONEY. Some people got to have it.
 
For Democrats working on the state budget, that last lyric has been amended to: Some districts got to have it.   
 
The D’s are pushing hard to protect K-12 school funding for districts rather than students. In other words, enrollment numbers be damned; urban districts, which have historically received higher funding levels than others, should stay that way regardless!
 
Thanks to items called the “minimum guarantee” and the “deghoster,” declining districts like Indianapolis Public Schools (IPS) have continued year after year to receive annual funding increases – even as enrollment levels have declined dramatically. Today, most of these urban districts get far more funding per student than rural or suburban schools. 
 
The Indiana Chamber’s education expert, Derek Redelman, notes that the state currently provides IPS with over $8,500 per student – far more than the $6,500 state average. When federal funds are included, the total for IPS rises to more than $9,400 per student, while the state average is just over $6,700. The numbers are even higher – over $15,000 for IPS – when local property taxes are included.
 
Yet, IPS Superintendent Eugene White today (one of a seemingly endless stream of testifiers, most of whom can now venture to the Statehouse committee rooms in their sleep) came before the budget conference committee with his hands out for more. Despite fewer and fewer students and additional increases in per pupil funding, White contends the money IPS gets from the state is still not enough. 
 
White had no answer for Rep. Brandt Hershman (R-Monticello) when asked what districts should be cut to give IPS more money or whether he would support a tax increase to give his district more money. 

According to Redelman, “This is the epicenter of our current budget debate. Democrats firmly back districts while Republicans want to fund students.”
 
Just how wide is the gap?
 
After it was noted that IPS funding would take a cut under the Senate budget bill (though it would get one of the largest increases per pupil) while the growing Hamilton Southeastern district would see an increase (but a cut on a per pupil basis), Rep. Bill Crawford (D-Indianapolis) imparted this bit of logic:

“We (the Democrats) are looking for a way to make K-12 education (funding) more equitable. If we have to bring the top (funded schools in the Senate plan) down to bring the bottom up, I’m for it.”

Hoosier Issues in Kentucky Special Session

Indiana isn’t the only state reveling in the joys (insert your own joke here) of a special session – our neighbors to the south called back lawmakers for their own budget issue. Unlike Indiana, Kentucky is facing a nearly $1 billion budget shortfall.

While the race to finish a budget continues here, Kentucky legislators sent a revised plan to the governor on Wednesday (see story) . Several decisions being made in the Bluegrass state directly affect Hoosiers:

Legislation that would have allowed video slot machines at Kentucky horse tracks squeezed through the House, but failed in Senate committee this week (had this passed it would have meant fewer Kentuckians crossing state lines and less revenue for Indiana). This has been an ongoing debate in Kentucky, and this surely won’t be the last attempt by proponents.

Several years in the works, Kentucky finally has developed a funding plan for its share of the Ohio River Bridges Project, which would allow for two new bridges connecting the two states. (Read the 2005 BizVoice® story and the 2007 update.) Indiana plans to fund its portion of the project with Major Moves money. 

Now back to the countdown closer to home. We didn’t fare too poorly in Kentucky – we’ll see what happens here though.

Conference Committee 101

The budget bill will be in conference committee the next few days – perhaps even through Sunday. Lawmakers will officially return at 9:30 this morning, although most negotiations and compromises take place well out of the public view.

A few basic things to keep in mind about a conference committee:

The makeup is two members (“conferees”) each from the House and Senate as well as “advisors” – all appointed by House Speaker Pat Bauer and Senate Pro Tem David Long. These conferees and advisors may be removed at any time by the respective House and Senate leaders (generally only done if the appointee is threatening to go against the party line).

The conference committee process is less structured than the regular committee process. Conference committees may meet within one (Senate rule) or two (House rule) hours after notice of the meeting is posted (on the bulletin boards outside the respective Senate and House chambers) and are open to the public “whenever feasible.” No further posting is required if additional meetings are necessary, and it is within the chair’s discretion to be forthcoming about time and place of any additional meetings.

A bill may pass out of a conference committee only with unanimous consent of the conferees. This is called the conference report. If it passes out of the conference committee, both chambers vote on the final version.