INDIANAPOLIS -- Even the most optimistic person in the world would have trouble putting a happy face on the problems confronting Indiana lawmakers these days.
Each day, I am reminded that this session is different. We must deal with a recession that has caused thousands of lost jobs and a pinch in unemployment assistance, along with a steep decrease in state revenues.
Combined, they have created an unusual environment that will test the patience of all legislators. Most recently, we have added the woes of the Indianapolis CIB (Capital Improvement Board) to our discussions.
This week, the latest revenue forecast provided more concerns.
State tax collections for March were $87 million less than expected. Total revenues are nearly $755 million less than projected, and many experts believe that deficit will reach $1 billion when the fiscal year ends on June 30.
In summary, we do not have the funds to pay for all the programs contained in the budget. The Daniels Administration has cut the current budget by more than $750 million, and another $500 million might have to be taken out to make the numbers balance by the end of June.
Just as importantly, this means that the creation of the next state budget will force the Indiana General Assembly to find creative ways to provide the funding needed for job creation/retention, schools, health care and public safety.
The Senate majority shows an intention to shore up state support for K-12 by using federal stimulus money.
The governor has opposed any use of the state's surplus -- which totals more than $1.3 billion - until the crisis gets worse.
Considering our current environment, the debt to the federal government for unemployment, and our promise to support local schools, I am not sure how the governor can avoid using some of these reserves or the federal package.
As I look at the problems facing Indiana, it becomes clearer that passing a one-year budget is not unreasonable, but a better approach. The House plan divides the actual budget into three parts that help preserve our commitment to education and other critical state programs. The plan is balanced and prevents a tax increase by using some of the reserves.
A one-year budget gives us more time to see if the economy recovers, and to determine just how the federal stimulus package can help Indiana. If things do not improve, we can take the necessary steps next year to protect the people of Indiana.
These tasks are not easy ones, but now is the time to show leadership at the Statehouse. We need to pass a responsible budget. Our work is not impossible as long as we stay focused on what is important.
With all the important tasks in front of us, it is hard to believe that the Legislature should spend any time on a proposal to bail out the Indianapolis Capital Improvement Board (CIB), the entity that runs Conseco Fieldhouse, Lucas Oil Stadium, Victory Field and the Indianapolis Convention Center. CIB officials claim that operating expenses have put the board $47 million in the red.
A CIB rescue package is contained in House Bill 1604, which is under consideration in the Indiana Senate. The proposal offers up many ways to raise revenue in the Indianapolis area, including tax increases on hotel rooms and food and beverages. The most prominent part of the plan calls for doubling Indiana's alcohol taxes. Marion County leaders in the Senate and the House are putting together proposals.
The Senate's plan states the revenue generated by this alcohol tax increase would be distributed statewide to local cities and towns, not just Indianapolis.
My biggest concern about our relief to CIB is the fact that board officials knew there was a shortfall at the onset of the project.
I also want to address some of the ongoing questions about the property tax caps. In 2008, the Legislature passed a measure that places the caps into state law. We are now debating whether to put them into the state Constitution.
The issue of the amendment involves putting language into the constitution that says it is OK to treat taxpayers differently. I believe fairness is important and we should strive for a method that gives reasonable relief and equitable treatment to all.
The House has passed language that would speed up the process and implement the 1-2-3 percent caps this year. The purpose of speeding up the enactment of the property tax caps already in law would show how the caps will realistically affect homeowners, rental property, farms, business owners, schools and other local units of government.
I anticipate that there will be more discussion on the amendment in the next few weeks. Regardless, taxpayers are protected with the current law in place. The only matter that needs to be realized is the change of assessed value will also affect the amount of taxes paid. A collection of the data to understand the true impact will be important to make an informed vote. I will keep you posted as the discussion continues.
Our responsibility at the Statehouse is like maneuvering a ship in uncharted waters. In the end, I know that we can resolve the important issues.
I hope you will consider a visit to the Legislature. I appreciate those of you who have stopped in to talk about your concerns.
Personal contact is the best way to voice your feelings on these hot topics.
If you need to reach me during the 2009 session, you can call the toll-free Statehouse telephone number of 1-800-382-9842, write to me in care of the Indiana House of Representatives, 200 W. Washington St., Indianapolis, IN 46204, or submit your comments to my web site at www.in.gov/H44. While visiting my web site, you also can sign up to receive regular e-mail updates from the Legislature.