April 17 revenue forecast to drive final days of General Assembly session

With only one bill sent to the governor for his signature as of late March, it may be hard to realize that the April 29 scheduled
end date for the 2009 session is just one month away.

Before then, much critical work must be completed, but virtually all of that will take place after April 20.

Committees will wrap up work by April 9 and, by the middle of the next week, the House and Senate will finish voting on bills
from their opposite chambers. When the two bodies agree on the original language, the bills head to conference committee to
be ironed out—or used as bargaining chips.

But there really isn’t much of universal interest that is likely to transpire in regular committee deliberations between now
and the April 9 deadline. Most major pieces of legislation already have cleared or been defeated in committee, and few major
bills remain to be heard.

While every bill is important to some constituency, very few major pieces of legislation have been progressing due to the
key overarching issues facing legislators this session: the budget puzzle, use of
stimulus funding, restoring the Unemployment Trust Fund to solvency, and—more recently—speeding up the effective
date of the
property tax caps, and finding a solution to the Capital Improvement Board operating deficit.

The House committee schedule in particular has been rather empty, and you shouldn’t expect it to gain any steam. Among the
few bills of any consequence and controversy nibbling at the margins
are the workplace smoking ban and the casino and racino tax-break proposals pending in the Senate.

The smoking ban bill has been waylaid as advocates seek support to remove the
exemptions added on the House floor, but there doesn’t seem to be enough backing for a pure bill to emerge from the Senate
Committee on Commerce, Public Policy and Interstate Cooperation, and both sides seem prepared to scuttle a compromise version.
Any tax breaks for gambling operators would seem to be controversial enough to prevent it from being considered on its own
merits, and would seem destined for budget negotiations.

The key date to remember is April 17. That’s when the bipartisan Revenue Technical Forecast Committee releases its projection
of revenue for the biennium. The early workups suggest the panel’s estimates will fall $1.4 billion short of what
the same group projected two years ago when lawmakers drafted the budget. That would mean revenue would fall short of the
already pessimistic December forecast by some $700 million.

Whatever figures the economists and state fiscal experts derive will be the numbers lawmakers will adhere to in drafting a
budget beginning April 20, the first business day following release of the forecast.

There likely will have to be even more
severe cuts than contemplated even a few weeks ago, and other elements will be wrapped into the budget for assorted reasons,
largely as a result of horse trading.

That’s why you can ex
pect to see assistance in coping with the CIB operating shortfalls and tax breaks for the gambling operators in the budget,
should lawmakers decide to include them at all. Voting on individual items may be too politically unpalatable, but lawmakers
may recognize they can’t let the Indianapolis sport facilities and Indiana Convention Center slide backward as we prepare
for more sport finals and the Super Bowl, and to steal conventions from suddenly unpalatable venues like Las Vegas.

Similarly, lawmakers may feel uncomfortable helping casinos and racinos, but also understand how cushioning their tax blow
ultimately will enhance the state revenue flow.

Already headed to conference committee is the measure passed by the Senate March 24 that would begin the lengthy process of
restoring the solvency of the Unemployment Insurance Trust Fund.

Democrats largely oppose the Senate version (you may recall that the House simply punted on it the first time around) because
of long-term benefit reductions to laid-off workers.

Both sides quietly suggest there is room for compromise, with Republicans willing to consider changes in the business tax
mix (and hike) and Democrats serving notice they could back benefit cutbacks that are not as disproportionate as those approved
by the Senate.

As legislators steel for the revenue forecast, work will begin with business, labor, and the executive branch toward agreement
on a compromise version that would restore solvency over a period that could extend out a decade.

This issue has achieved such salience that legislative leaders already are suggesting a special session would be justified
to pass a bill if the next few weeks fail to find common ground.

Outside of the quiet work on the unemployment insurance bill, don’t expect much high-profile action until mid-April.