Final negotiations on Indiana budget start next week

A $28 billion budget proposal that cleared the Indiana Senate on Thursday includes a way to fine boycotting lawmakers — a provision Democrats oppose — and doesn't include an automatic taxpayer refund that the Republican governor wants.

So they'll be plenty to talk about when lawmakers from the House and Senate try to hash out a compromise proposal before April 29, the last day of the legislative session.

Perhaps the most politically charged section of the budget plan would allow $1,000-a-day fines against boycotting legislators. Republicans who support the proposal say the so-called "anti-bolting statute" is needed to prevent boycotts, like the five-week walkout by House Democrats this year, from becoming a regular tactic.

Democratic senators, who are outnumbered 37-13 in the Senate, said the right to boycott is a crucial protection for the minority. They urged colleagues to remove the provision, which they've said may violate the Indiana Constitution.

"Republicans and Democrats have in some form exercised this right to withhold a quorum," said Sen. Tim Lanane, D-Anderson. "I just don't think this is the way to approach this. It's sort of an emotional reaction to what happened."

Senate Appropriations Chairman Sen. Luke Kenley, R-Noblesville, said he's willing to work on that part of the bill, but said the length of the House Democrats' boycott has spurred a call for some way to prevent similar walkouts.

"The dynamic here has been changed by the thought that somebody could leave for 30 days," Kenley said. "Something needs to be done."

While Republicans and Democrats spar over that issue, Republicans in the Senate are butting heads with fellow Republicans in the House over the governor's proposed taxpayer refund. Daniels has advocated the idea and included in his budget plan an automatic refund if state reserves exceed 10 percent of annual needs.

House Republicans kept the refund in their budget, and House Ways and Means Chairman Rep. Jeff Espich, R-Uniondale, said he will fight for its return during budget negotiations.

"If the state is doing well because the taxpayers are paying lots of taxes, then I think it is appropriate to return part of that," Espich said.

Kenley maintains there are better ways to use extra money if the economy grows faster than expected. Under the Senate budget, if the general fund balance exceeds 12 percent of appropriations, the extra money would go to unfunded pension liabilities for teachers and public employees. Kenley said using any extra to pay down $11 billion in unfunded liabilities would help budgets for years to come.

"To fail to adequately pay off that large outstanding debt would leave our fiscal problems to the next generation," Kenley said.

The two-year budget, which would take effect July 1, would give slight funding increases to schools without raising taxes. The budget would leave Indiana with more than $1 billion in reserves. Some school advocates want more money directed to education and less left in reserves, but Kenley said the state isn't sure how much it will take in and doesn't want to spend money that may not materialize.

There are several other differences between the House and Senate versions of the budget, including proposed cuts to existing horse racing subsidies, but Kenley said many parts of the budget weren't drastically different.

"The numbers really aren't too far apart," he said.