In about-face, state lawmakers find compromise late Friday

The leader of the Republican-controlled Senate said negotiators for both parties had reached tentative deals on major issues
and it was possible they would be passed and the Legislature could adjourn late Friday night.

Senate President Pro Tem David Long, R-Fort Wayne, said the tentative agreements between Democrats who control the House
and the minority parties in both chambers included a one-year delay of an unemployment insurance tax increase, tax breaks
and incentives designed to create jobs, and allowing schools to tap into property tax funds to help offset a portion of $300
million in cuts in operating expenses.

He said the caucuses had to review the proposed compromises, but he hoped the proposals would pass by late Friday night and
the session would end—two days before a Sunday deadline for adjourning.

Democratic House Speaker Patrick Bauer of South Bend said he thought lawmakers would wrap up business Friday night, then
he winked.

It was a major turn of events from earlier in the day when private talks were stalled, particularly on the unemployment insurance
and job-creation issues, and Bauer had said he was not hopeful business could be concluded on a positive note by Friday night.

But legislative leaders met privately in the evening, a sign they still were trying to reach compromises.

Bauer had said that House Democrats were willing to go along with delaying by one year an increase in taxes that businesses
pay into the state's unemployment insurance fund. Republicans want to delay the tax increase because they say it would
cause businesses to lay off workers in an economy that is still foundering.

Senate Republicans passed a bill earlier this session that would delay the tax increase slated to take effect in April by
one year. Bauer said that would save businesses about $500 million, although previous estimates have been between $360 million
and $400 million. But Bauer said Senate Republicans had now wanted a two-year delay.

He said that was unacceptable, characterizing it as a $1 billion bailout for businesses at a time when the state's unemployment
insurance fund has borrowed $1.6 billion to remain solvent.

He also said Senate Republicans were using the unemployment insurance issue to hold other measures hostage. They included
the bill that would allow schools to tap money from property tax accounts to offset budget cuts for general operating expenses.

But Long said they had tentatively agreed to a compromise that would allow schools to shift 5 percent of 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.

Rep. Robert Behning, R-Indianapolis, said 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.