FEIGENBAUM: Democrats start to embrace constitutional amendment

What changed over the last year to make House Democrats so eager to allow Hoosier voters to amend the property-tax caps
into the Indiana Constitution?

The calendar.

House Democrats had—albeit reluctantly—embraced
the caps (also referred to as circuit breakers) as statutory law as part of a larger package of tax reform and restructuring
effectively demanded by the electorate (although we don’t recall voters clamoring for the sales tax increase that was
a condition precedent to passing the caps). However, they were far less eager to take a complicated law and allow it to become
part of a constitution much more aspirational than technical in nature.

Few issues, however, have seen such agreement
among Hoosiers during their political lives as the property-tax-cap constitutional amendment. The Hoosier Survey commissioned
by the Bowen Center for Public Affairs at Ball State University finds “strong statewide support”—64 percent—for
the amendment among voters, perhaps even more enthusiastic backing than the concept originally received.

When
the Indiana Manufacturers Association backed off its opposition to the caps, that left opposition from “only”
the Indiana Chamber of Commerce, the Indiana Farm Bureau, and city and county governments and their professional associations.
Democrats were ostensibly concerned about the impact of the circuit breaker on local government services, and claimed to want
time to assess how the caps would work in practice.

The effect has been about what most expected, but Democrats
and Republicans disagree on what it means.

Democrats see employees and vital public services being cut and fees
raised to compensate, while Republicans see local governments forced to face the budget reality every Hoosier household confronts.
That means becoming more efficient and jettisoning or cutting back frills.

The ostensible failure of affected units
of government to make lawmakers feel their pain also has tempered Democratic resistance.

Add a growing feeling
of confidence among Republicans that they will be able to recapture the House in November and significant trepidation among
Democrats that they are not on the side of public sentiment on the issue, and you understand why a House floor vote is likely
within days on a property-tax-cap resolution that would allow a November public referendum on amendment status.

Democrats would be able to find themselves on the leading edge on the tax-cap issue, and perhaps blunt—or even pre-empt—the
cap emphasis Republican Gov. Mitch Daniels is expected to convey in his Dec. 19 State of the State Address.

So
it appears a good bit of the legislative heavy lifting will take place in the first few weeks of the session, rather than,
as has been traditional, waiting until the bitter end.

Still to be resolved in the House, however, will be the
unemployment insurance package.

Senate Republicans want to delay the effective date of the pending tax hike on
big business, while Democrats aren’t quite so enthusiastic, and see an opportunity to be milked.

Watch for
Democrats to require Republicans to make good on their contention that delaying the tax hike will save jobs by insisting on
protection for workers or directing some related spending to jobs programs.

Democrats also will seek to paint the
GOP as being insensitive to small businesses, because entities with good claims experience were slated to see their unemployment
insurance tax rates decrease under the law that could now be delayed.

Democrats also will likely make a political
point about Republicans’ wanting to wait for a potential bailout from the federal government.

As of mid-December,
Indiana owed $1.4 billion to the feds for loans needed to make the state unemployment insurance fund solvent, and some six
states had borrowed more. In making the proposal to delay the effective date of the tax hike, Republicans suggested that,
given how deep in debt so many states were finding themselves to the feds, the federal government likely would be forced to
step in and forgive the loans or offer an extremely favorable repayment plan.

Don’t expect Democrats to let
this pass without grumbling publicly about hypocrisy—Republicans who opposed other federal bailouts are now wrangling
for one. Demos, on the other hand, are hinting that the federal government may be more likely to help those who help themselves
first, while Indiana would be headed in the other direction.

So we have seeming consensus on one previously divisive
issue. But don’t expect Democrats to be so submissive on the unemployment-insurance issue—at least not before
winning concessions.•

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Feigenbaum publishes Indiana Legislative Insight. His column
appears weekly while the Indiana General Assembly is in session. He can be reached at edf@ingrouponline.com.