FEIGENBAUM: Education money helped land key Democratic votes

Just as Hoosiers have become accustomed to for the last century-plus, lawmakers came to terms on a state budget before the July 1 deadline, allowing affairs of state to continue unabated.

Since more than 15 years have transpired since legislators took budget negotiations down to the figurative last minute, and it was the first special session for this governor and many solons, some anxiety grew over the final two weeks.

But as the days grew shorter, partisan proclivities gave way to true philosophical differences and, as we’ve seen when the going gets tough, adult leadership prevailed and compromises ensured that all state services—even those euphemistically referred to as "non-essential" as a government shutdown loomed—would continue.

As both House Speaker Pat Bauer, D-South Bend, and House Republican Leader Brian Bosma, R-Indianapolis, see it, this is definitely a "Republican-flavored" budget. Republican Gov. Mitch Daniels laid the framework, and legislators from both sides of the aisle largely abided by his bottom lines of spending, state agency cuts and surplus.

Senate President Pro Tem David Long, R-Fort Wayne, won kudos from many for preventing "gambling interests" from "hijacking" the special session, as he believes they did during the last week in April. There were no tax breaks or expanded forms of gambling for operators, nor moving of any gambling licenses or properties.

Where Democrats won key concessions was in the area of school funding, with enough school-funding formula tweaking to persuade 14 Demos in the House to join all 48 Republicans to back the budget on the final day, but not enough change to bring aboard all Democrats whose urban and rural districts now face real budget cuts.

Overall, K-12 education gains an average increase of 1.1 percent in calendar year 2010 and 0.3 percent in calendar year 2011, with a state promise that an "education trigger" will direct 50 percent of state revenue above projections to education. The other half of any bonus bucks will go to the state’s general fund.

There was no discussion of any substance of further shoring up the Unemployment Insurance Trust Fund, and no serious opposition arose to the myriad minor tax-related changes that popped up. One item that might be a surprise to new small-business owners: a requirement that any retail merchant registrant after Dec. 31, 2009, must report and remit state gross retail and use taxes through the Department of Revenue’s online tax filing program.

The plan approved by lawmakers to reorganize and refocus the Indianapolis Capital Improvement Board seemed to satisfy no one, from the governor to Indianapolis’ Republican Mayor Greg Ballard to the city’s Democratic legislators.

The CIB "bailout," which redirected sales tax revenue from state coffers to the downtown professional sports stadiums, turned out to be a convenient target for several lawmakers seeking excuses to oppose the budget in the final day of the session, and it widened the chasm between Hoosier "have" and "have-not" communities.

The CIB "subsidy for millionaires" will continue to prove politically problematic, particularly if the facilities continue to struggle and Democrats unleash their rhetorical attack on CIB outside central Indiana.

"This is not the budget that House Democrats wanted," Bauer said after passage, but he did take credit for saving jobs of thousands of teachers and workers—and for avoiding the "catastrophe" of a government shutdown that Daniels prematurely sought to pin on him.

However, as we’ve explained, this is a Republican budget, and Bauer, who swallowed hard before his caucus signed off on it, will show no mercy in attacking Republicans for any pain it causes as House Democrats look toward retaining control of the House in 2010, ensuring that they can draw House district lines after the decennial census.

Republicans were gleeful in 1993 when they overrode a Democratic governor’s budget bill veto just hours before the state would be without any budget. They thought they could stick then-Gov. Evan Bayh with a budget that would force him to manage government frugally on Republican principles for the remainder of his term.

But the economy improved, gambling revenue flowed into state coffers, and Bayh built huge surpluses and electoral good will-just the opposite of what Republicans had expected when they found themselves in the same political situation then that Democrats are in now.

Sometimes things just don’t work out as expected, and Bauer must be wary.

The bottom line is that we have a budget, and while no one-including its Senate architect, Sen. Luke Kenley, R-Noblesville-truly professes to be satisfied with it, the alternative scenario was unacceptable, and Hoosiers expected resolution.

Lawmakers will return in January, primed with six months’ worth of new economic data and quality time with constituents as they face the 2010 elections. Expect additional fiscal fine-tuning-perhaps more macro than micro.

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Feigenbaum publishes Indiana Legislative Insight. He can be reached at edf@ingrouponline.com.