Governor to Legislators: A Billion is a Billion (in Reserves)

Governor Mitch Daniels presented his revised budget proposal to a special legislative committee this afternoon. He closed with announcing that the special session will begin on June 11 (1 p.m.). Among his key earlier points:

  • The special session is "not something to be regretted, but something to be grateful for."  He made it clear that he would have vetoed the proposed budget (defeated in the House in the last minutes of the regular session) due to the unrealistic revenue forecast that was in place at the time
  • He hopes legislators give serious consideration to an education trigger. If revenues do exceed projections at some point in the next two years, half of the excess would go toward education and the other half to the state’s rainy day fund
  • He indicated flexibility within his parameters to legislative wishes with the following exceptions: no gimmicks, no dipping into pension funds and only using one-time federal stimulus money for one-time purposes. "A billion means a billion (for reserves). It’s not a starting point."

Sen. Luke Kenley (R-Noblesville) offered a preview of things to come for the committee:

  • State Budget Director Chris Ruhl answering more legislative questions on Thursday. A recommendation from the administration on the CIB funding crisis for Indianapolis sports and convention facilities is expected later that day
  • Testimony Thursday and Friday from proponents for K-12, higher education, Medicaid/social services and economic development/worker training
  • Legislative caucus presentations on Tuesday, June 9, with a focus, according to Kenley, on "major points you would like to see in the budget, not bringing in the additional bills you would like to see addessed in the special session"

Text of the governor’s address to the public on Monday and slides used in his presentation are available here

Statehouse Leaves One Searching for the Right Words

I’ve been doing this writing thing for publication for more than 30 years now (must have started from the crib, right?) and rarely experience trouble expressing myself. The problem here is not the dreaded writer’s block, but what not to say following a long, long day at the Indiana Statehouse on Wednesday.

(Indiana Chamber members can get the full story directly from ICC president Kevin Brinegar on Friday from 9:30-10:30 a.m. ET in our monthly Policy Issue Conference Call. Kevin has just about seen it all in his nearly 30 years around the Statehouse, but Wednesday’s developments had him joining others in shaking his head. Remember, this is for members only. Registration is required).

I’ll try to be brief. First key point: At a time when economic fortunes are low and unemployment is high, legislators pass an unemployment insurance trust fund bill that practically guarantees additional job losses. Figure that one out. Second, a state budget proposal (the lone requirement for the nearly four-month session) fails in the House (71-27) and that is the good news. The "compromise" would have started the steady climb up the "cliff" that everyone said needed to be avoided (in other words, relied too heavily on stimulus funds and set the stage for big tax hikes two years from now or sooner) and took several steps in reverse on education policy.

I’ve come to learn in 11 years at the Chamber that negotiations in the final days of the session produce the ultimate final bills on the major issues. I’m not a big fan of that, but I’ve come to accept it as reality. The products of these conference committees, however, seemed to evolve from one-sided negotiations. House Republicans and Senate Democrats, the minorities, talked of being shut out. Senate Republicans unfortunately seemed to be missing in action based on the conference committee outcomes.

Just a few details. The unemployment "solution" was termed a $685 million tax increase on employers over two years. Econ 101, or maybe freshman common sense, tells you struggling employers faced with monumental tax increases will have to cut costs in other ways — quite likely in personnel. Passionate speeches aside from both caucuses, the bill passed the House 52-47 (party line vote) after 96-3 passage in the Senate.

The budget proposal: Too much spending ($28.1 billion over two years when the state doesn’t have that much money to spend). A message that we’re still not serious about education. No scholarship tax credit. A cap on charter schools at a time when everyone from President Obama on down is calling for more school choice. House Minority Leader Brian Bosma said this move would have jeopardized $275 million in education stimulus funding and disqualified the state from Obama’s $5 billion Race to the Top education grant fund.

I’ll stop there. There will be plenty more to come as those two dreaded words — special session — are now reality.