STATEHOUSE DISPATCH: Action will focus on three bills in dash to the finish

This week will see the final round of action by the House on Senate bills and the Senate on House bills, and then the real work of the Legislature begins.

Legislation that has passed both chambers in different forms may be reshaped in a manner acceptable to both, and legislation that has passed only one chamber remains eligible for inclusion in related bills and final passage by both the House and Senate.

Few people gave much credence to this year’s House-passed budget bill as a harbinger of what to expect at session’s end, but the version the Senate approved last week will be a better guide. Hoosiers are just now getting their first peek at it. It included the Senate Republican property tax relief package, which sailed through the Senate Tax & Finance Policy Committee unanimously, with all the Democrats joining Republicans in approving it.

Another key part of the fiscal package will be HB 1835, the so-called “slots at the tracks” bill. Sen. Luke Kenley, RNoblesville, wants to use for property tax relief $800 million in proposed horse track license fees, an estimated $50 million annual tax flow from the slot machines, and the $27.5 million annual riverboat casino subsidy of the state’s two horse tracks.

Since property tax reform and relief is so closely allied with the budget, the two budget bills and HB 1835 now become the holy triumvirate of legislation still outstanding this session, and conference committee deliberations on these three bills will effectively become interdependent as observers wait for the figurative late April puff of white smoke.

But negotiating cannot begin in earnest until members of the state’s Revenue Forecast Technical Committee doff their green eyeshades and serve up the final fiscal forecast of the legislative session. This is the forecast that traditionally establishes the four corners of the budget bill, because it is the honest, nonpartisan estimate of revenue collection for the remainder of fiscal year 2007, and then looking forward through the biennium.

Those who shape the budget typically take the revenue estimates, shave off a fraction to make everyone feel a bit more comfortable, and then craft a budget that is based upon what the state can reasonably be expected to take in.

While this will be the critical estimate upon which lawmakers will wait and ultimately rely, it will not be the only one.

Because of the other two major bills still floating around, other fiscal estimates will be important.

Legislators need to know how much can be expected in slot machine taxes, but so far there aren’t any reliable public numbers that predict the state’s take, a number that will need to be adjusted to account for the potential displacement of riverboat tax revenue by the new competition, and from special tax givebacks in the bill.

There are also questions about the quadrupling of license fees for the horse tracks from $100 million in the House version to $400 million for each track in the Senatepassed bill. While property tax relief relies on this up-front revenue, the House has expressed concern about the high cost, particularly when coupled with a reduction in the number of slot machines authorized for each track, from 2,500 each in the House version to 1,500 for each in the Senate.

Lawmakers will also be inundated with (and some may even want to see) data that show how the tax relief measure would impact assorted school districts and communities. And the business sector will weigh in with its own studies that will undoubtedly suggest that the tax package, when combined with the budget, will stifle economic development in the state.

The negotiators on these three key measures-and they will probably number not more than five or six total-will have to walk a tightrope this session, working with their legislative leaders and caucuses to ensure that what they arrive at will be acceptable to a majority of lawmakers in each chamber. And they’ll have to take into consideration the assorted interests who will benefit or be harmed as a result. Of course, they have to keep the governor in mind as well, because he has to sign the bills into law.

In the end, there may be an interesting merger of one or more-possibly all three-of these bills into a package to ensure their passage. This will muddy the issues and force lawmakers to take a dose of the bitter with the sweet. The same thing happened in 1993, when casino authorization was inserted in the budget.