The gavel drops: Legislature ends session with compromises

Democrats and Republicans in the General Assembly closed some partisan divides on some major issues early Saturday morning
and adjourned the 2010 legislative session two days before the deadline for leaving.

"All's well that ends well," Democratic House Speaker Patrick Bauer of South Bend said before gaveling out
the House.

The compromises approved early Saturday included a one-year delay on unemployment insurance tax increases, some tax breaks
and incentives designed to create jobs, and allowing schools to tap into some property tax accounts to help offset a portion
of $300 million in cuts for general operating expenses.

Negotiations on those issues between Democrats who control the House and Republicans who rule the Senate remained stalled
for much of Friday, but deals were struck Friday night and were approved with bipartisan support by both chambers before 1
a.m. Saturday.

"We started talking about what really were the differences," said Senate President Pro Tem David Long, R-Fort Wayne.
"We worked through those and had some side conferences with some key conferees talking on a couple key points and came
back and had an agreement within about an hour."

House Democrats went along with delaying by one year an increase in taxes that businesses pay into the state's unemployment
insurance fund, which has borrowed $1.6 billion in federal money to remain solvent. Republicans wanted to delay the tax increase
because they said it would cause businesses to lay off workers in an economy that is still foundering.

In return, Senate Republicans agreed to some job-creation incentives House Democrats wanted.

They include a new employer tax credit equal to 10 percent of the salary of each newly created job, and a program that would
allow the state to spend some money to draw down federal stimulus dollars to help subsidize the salaries of people hired who
were unemployed or on federal food stamps.

A state business tax credit would now be allowed to be given to companies with fewer than 35 employees.

The bill also would require the state Department of Labor to draw up new guidelines for cracking down on employers who misclassify
workers as independent contractors to avoid paying unemployment insurance taxes.

Another bill approved would allow schools to shift 5 percent of an account funded by property tax funds to help offset a
portion of the budget cuts. They could shift an additional 5 percent for operating expenses if they did not give salary increases
to most teachers next school year.

Schools could give so-called step-up increases that provide more money for many teachers for each additional year of experience
as long as they did not exceed 2 percent of their salary.

"It has been a long journey," Rep. Greg Porter, D-Indianapolis, said of the bill. "It helps avoid teacher
layoffs and program cuts."

Lawmakers had earlier approved legislation to tighten lobbying and ethics rules, and legislation that will allow voters to
decide in November whether to amend property tax caps into the state constitution.