It's the economy.
That is the biggest problem facing state legislators this year, said Rep. Clyde Kersey, D-Terre Haute, at Saturday's Crackerbarrel in the YMCA.
Indiana faces an $850 million deficit over the next two years.
"Every report we get is bad," he said. "We either flat-lined or cut every program across the board, except for education."
Lawmakers took $200 million from the settlement paid by tobacco companies to Indiana and put it into education. But that only amounted to a 2 percent increase for public education and it only restored funding to the level of two years ago, not really an increase, he said.
"I'm not happy with this budget, but we can't get more money.
"Everyone is going to be impacted by this budget and there are going to be hardships," Kersey said. "There's no light in the tunnel."
On the bright side, Kersey doesn't foresee any tax increases in the immediate future, because there is no support for increased taxes in the House or Senate.
"I just don't see it happening," he said.
Rep. R. Brooks LaPlante, R-Terre Haute, came armed with a large display board indicating state lawmakers have outspent inflation by some 33 percent. Some budget items are now more than 70 percent greater than inflation, LaPlante said.
Using a per capita basis, LaPlante said general government spending has outgrown inflation by 77.3 percent. Public education has been funded at a rate of 43.4 percent higher than inflation and welfare has grown to be 34.2 percent higher than inflation. Spending on health and conservation issues have not kept up with inflation.
Meanwhile, Indiana residents' incomes have fallen below the national average.
In 1965, Hoosier workers were earning 100 percent the national average but today Hoosiers are paid 87 percent as much as workers across the country.
Looking to the future, LaPlante expects the state will have to change spending priorities.
"If we're going to take care of our seniors, if it takes half our federal budget today, think what it's going to take in 20 years," LaPlante said.
He expects that two decades in the future, able-bodied people will receive fewer benefits from welfare than they do today and more money will be funneled into senior care.
LaPlante sees Indiana's budget crunch due in part to unbridled affluence in the past decade. Typically, every five years the United States has faced a recession. But America has been 10 years without an economic downturn.
"Recessions are good, one of the most positive things that can happen for government because recessions are a reality check," he said.
In times of revenue loss due to recession, lawmakers learn to spend less. When the economy grows unchecked for a decade, lawmakers have a much harder time balancing the budget, LaPlante said.
Approximately 30 people attended Saturday's session.