STATEHOUSE DISPATCH

STATEHOUSE DISPATCH Legislators, governor disagree about special session

Assigning responsibility for what stuck us with a special session is a political post-session must, but playing the blame game usually isn’t a productive exercise.

This time, however, may be different, and what both of the principal sides in the dispute over the failure to enact a budget now may perceive as blame ultimately could turn out to be a blessing.

To review: On April 27, the final night of the 2009 session, the Republican-controlled Senate overwhelmingly passed a budget bill that its conferees had worked out with House Democrats.

But during the course of the day, House Democrats realized the budget bill spent more than Republican Gov. Mitch Daniels was willing to accept. Instead of supporting the bill as a caucus and ratifying the Senate Republican action, members were freed to vote their districts, and the measure generated only about half the votes needed for passage.

Members of both parties castigated the governor for a week of moving targets that ultimately proved indefinite. They said he agreed to a budget bottom line with a $1.3 billion surplus at the start of the final week, then increased the required cushion to $1.4 billion the next day and, according to some, $1.5 billion on the final day.

The revenue forecast issued May 4 gave the governor the upper hand going into the special session.

Brandishing the April revenue collections report, Daniels explained that, for April alone, actual collections missed the revised forecast-barely two weeks old-by a jaw-dropping $255 million (a 15-percent discrepancy), five times the expected loss for the collective final three months of the current fiscal year.

If the April trend continues for May and June (which few expect, but no one rules out), the forecast would underestimate revenue by hundreds of millions of dollars more.

Daniels says it’s time to look fiscal reality in the eye, and that legislators must craft a realistic budget when he calls them back to Indianapolis, likely in late June.

He believes the April numbers offer clear implications for spending in the coming biennium: As much as $1 billion should be slashed from the last version of the budget.

But there remains a disconnect between lawmakers and the governor.

Both majority caucuses are skeptical about the governor’s proclamation that April losses are “undoubtedly going to be repeated in the last two months of this fiscal year,” and whether the ultimate shortfall will approach that $1 billion threshold.

Senate Committee on Appropriations Chairman Luke Kenley, R-Noblesville, has been openly skeptical about the nature and duration of the downturn. He still thinks the governor should have signed the Senate budget, then used his executive prerogative to cut where necessary.

Other leaders seek more specificity and direction from Daniels.

The governor wants the State Budget Committee to order a new revenue forecast, presumably in June, to guide budget deliberations.

But Kenley is concerned that overlaying another forecast would create additional confusion, and everyone would only end up arguing over the numbers again. House Speaker Pat Bauer, D-South Bend, also isn’t convinced a new forecast is necessary.

Senate President Pro Tem David Long, R-Fort Wayne, wants the governor to present an actual budget proposal. Speaker Bauer concurs with that idea, though he insists a one-year budget is appropriate. Bauer and Kenley both want the gubernatorial proposal to include a school funding formula, the details of which were one of the few sticking points between House and Senate negotiators last month.

Long prefers having the Budget Committee convene budget hearings before the General Assembly officially returns. That budget, as massaged, would be debated in a brief special session.

For his part, Kenley suggests a new set of legislative budget hearings when lawmakers return. He wants to afford the public a chance to comment, particularly on the likely changes to education funding.

Daniels is reluctant to intrude upon legislative prerogative and do more than offer “boundary conditions,” but he is flexible, and says he could adopt “a more directive approach.”

As the details are worked out, expect the governor to take his case on the road to the people, building popular support against a budget that overspends (whatever that elusive bottom line might be) and pressuring lawmakers back home to line up with him.

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Feigenbaum publishes Indiana Legislative Insight. His column will return in the issue immediately preceding the start of the special session. He can be reached at edf@ingrouponline.com.