Election could give GOP control of state policy decisions

With a Republican tide predicted to wash over the country in next month’s election, there is a very real chance that the Indiana House will be dominated by the GOP for the first time since 2005-2006.

If House Republicans take control, they will join their party mates in the Indiana Senate and, of course, the governor’s office, placing virtually all policy-setting responsibilities in Indiana in one party’s hands.

For those who favor Republican priorities, this could happen at no better time, even though Republicans would have the onerous duty of crafting a two-year state budget at a time when state revenues are drastically below what had been expected—and roughly equal to revenue in 2005.

“This is not going to be an easy two years. It’s going to be a very difficult two years and anyone who tells you differently doesn’t understand the circumstances,” said Rep. Brian Bosma, R-Indianapolis, who will be House speaker if Republicans win control. “We’re going to have to look at services that have been a given before and functions of government that have just been a given, and say, ‘OK, with the revenues that we have available, do we have to do this?’ And if we do, ‘Do we have to do it in this fashion?’”

But with that thorn comes a rose: Republicans simultaneously would have the good fortune of being in charge of drawing state legislative and congressional district lines, a decennial undertaking. If history is a guide, the party in power generally uses gerrymandering to ensure that it will stay that way for most of the ensuing decade.

If that happens, “whatever the governor wants will go flying through,” said House Speaker B. Patrick Bauer, D-South Bend, who will be minority leader if Republicans take control. He argues that only a Democrat-led House will provide needed checks and balances to Republican Gov. Mitch Daniels as well as the Senate, which is lopsidedly Republican and unlikely to shift to Democratic control.

Daniels’ agenda surely will get a better reception in a Republican-led House, as will the pent-up priorities of the lawmakers themselves. They include some highly controversial issues.

For example, Republicans are expected to wade into the school choice issue, where Indiana previously had dipped a toe by allowing a student who is unhappy with the public school district in which she lives to transfer to a new one without paying tuition. This time around, Bosma said, the GOP wants to provide state-funded grants to students who attend schools deemed to be failing to use at the school of their choice, including private and parochial schools. Republicans also want to expand charter school and virtual charter school options.

Equally controversial is a Republican plan to change the school-funding formula so that districts no longer receive the per-pupil funding when a child leaves the district. Instead, the money would follow the child to his new district. Democrats have maintained that some funding should remain at the child’s previous district because the fixed costs of keeping a school building open and utilities turned on do not disappear when a child leaves.

Republicans also want to give merit pay to high-performing teachers and give authority to local school administrators to fire low-performing teachers—an incendiary issue, Bosma acknowledged, that would threaten collective bargaining agreements and teachers’ union power. “We’ve got some ideas,” he said, but he declined to describe them, saying that doing so would be like throwing gasoline on a fire.

“Personally, I think those decisions should be made locally but there should not be a contract that completely hamstrings local superintendents and school boards from making decisions about children’s futures,” he said.

Said Bauer: “They’re centralizing all of education in Indianapolis in the governor’s office. As far as giving more power to local schools—that’s completely opposite of what they’re doing.”

By pursuing school choice and more charter schools, Republicans would be “abandoning the public schools and universal education,” he said, although charters are public schools that operate outside of district oversight. “They’re trying to privatize education.”

Bauer said that giving merit pay to teachers is fraught with complications. For example, it is difficult to measure the performance of teachers of English as a second language and those whose students have disabilities, he said. “They want one-size-fits-all,” he said, “and one size doesn’t fit all.”

The parties also disagree on how to create jobs, and whoever controls the House will control what measures are enacted.

“We came up with this agenda after our members and staff met with a lot of participants in job creation,” Bosma said. “We sat down with entrepreneurs who’ve made it. We’ve sat down with entrepreneurs who are trying to make it and tried to identify what road blocks there are for them in making it happen.”

Among them was Richard Mussman, president and chief executive officer of Nano-Rad LLC, an upstart in the Purdue Technology Centers that has developed a way to deliver low-dose radiation precisely where a breast-cancer tumor has been removed by lumpectomy. The Republicans’ conversation with Mussman and others led them to propose increasing the amount of venture capital tax credits from $500,000 to $1 million, suspending the application fee and reducing the application’s red tape.

"In the world of startups, there is an often-repeated maxim, ‘cash is king,’ reflecting the importance of being able to sparingly use each and every dollar to its maximum benefit,” Mussman said in an e-mail. “An increase in the Indiana tax credit frees up additional capital that can be significantly leveraged to drive our company's success."
 
House Republicans also want to encourage businesses to locate in empty structures by making the dinosaur building tax credit apply to smaller buildings that are vacant for a shorter time than now required to claim the credit.

Democrats, meanwhile, want to extend a tax credit to small businesses that hire unemployed Hoosiers and want to require contractors on state projects to staff their work forces with a certain percentage of Indiana residents.

The parties agree when it comes to an increase in the unemployment insurance tax on businesses, which was imposed two years ago but delayed last year in response to the economic downturn. Now, downturn or not, the state has no choice but to let the tax take effect Jan. 1, payable April 1, Bosma said. It is his preference—though not part of his caucus’s agenda—to phase in the increase, and he may propose legislation to that effect.

According to Marc Lotter, a spokesperson for the Department of Workforce Development, Indiana owed the federal government $1.8 billion as of late September and expects to owe $2 billion by the end of the year. Indiana has been borrowing since its unemployment insurance fund ran dry in December 2008. Some larger states owe more, but only Michigan has been borrowing from the federal government for longer.

Bosma said the GOP wants to investigate whether Indiana has been too generous, relative to its cost of living, with its unemployment benefits and will adjust to a level “that is compassionate to the unemployed but doesn’t send our economy further into the skids, our employers further into the skids.”