Statehouse victories tempered by Senate, budget concerns

Gov. Mike Pence and House Republicans entered the 2014 legislative session with big plans for education, taxes and roads, but they often found themselves running into Senate roadblocks.

By the end of their 10-week stint, lawmakers had delivered Pence much of what he sought, but in much smaller pieces than he first pressed for. And because Pence's agenda matched up closely with that of House Republicans, the two often found themselves locking arms against the Senate.

One of the first indications of trouble was on an issue that has won broad support among Democrats and Republicans throughout the nation: early childhood education.

Through the middle of the session, it appeared likely that Pence's preschool pilot plan might be tabled so lawmakers could study the issue over the summer first. Senate Appropriations Chairman Luke Kenley, R-Noblesville, told Pence early on that he would have trouble winning new spending in year in which tax collections have lagged and there was no budget up for consideration.

Lawmakers ultimately approved a preschool plan in the final hours of the session, but it relies on Pence finding money through budget cuts and private donations. A summer study committee also will examine the best options for preschool.

Senate President Pro Tem David Long, R-Fort Wayne, explained the Senate Republicans' approach, which he said involved "doing it deliberately, cautiously and not just saying, 'Well this has just gotta be done.'

"There's some evidence out there that some states have not had the success they hoped for. If we're going to do this in Indiana, we're going to make sure it works and it works correctly," he said.

Democrats who were seeking a more expansive preschool program — Senate Democrats proposed funding a state-run plan rather than using vouchers — were critical of the victory lap Republicans took at the close of session.

"We've been reduced to these sort of quasi-celebrations over a lot of quarter measures and things that sound good on paper and maybe impact some balance sheets, but really don't do anything to affect the people of Indiana," said House Minority Leader Scott Pelath.

The governor's tax cut proposal this year was also run through the wringer in the Senate before emerging with a much different look than the plan Pence originally sought.

Pence dialed back his initial call to eliminate the business tax on equipment completely as local opposition to the measure mounted. The final package of tax cuts never included a direct cut to the equipment tax and simply gives counties the option to cut it. It also pushes the start to July 1, 2015.

Delayed rollouts and major alterations are hardly new when it comes to the governor and tax cuts. Pence made cutting the state income tax by 10 percent the centerpiece of his first-year agenda. Lawmakers ended up giving him half the cut he originally sought and delaying its full impact until 2018.

House and Senate Republicans have also taken to using the governor's tax cut plans as vehicles for their own favored cuts. The elimination of the state's inheritance tax was tacked onto the 2013 plan and a cut to the state's banking tax was paired with a further cut to the corporate income tax, then added to this year's package of tax cuts.

It's a frequent dynamic at the Statehouse, where ideas big and small are floated in the House or by the governor's office and then run into intense scrutiny in the Senate. And it wasn't just Pence priorities that struggled through the Senate this year.

A measure pushed by Rep. Jud McMillin, R-Brookville, that would have forced some welfare recipients to undergo drug tests in order to receive their aid sailed through the House in the final hours of the session, 81-17. But it failed 24-24 in the Senate after a bipartisan mix of senators raised broad questions about unfairly punishing the state's poor residents.

"We peeled the onion last night up here at the microphone," Long said Friday. "In the end, this wasn't thought through as well as it could have been."

For his part, Pence said he was "grateful" for the help of Long and House Speaker Brian Bosma.

"I'm just extremely grateful to the legislative leadership in the House and Senate for what was a very consistent dialogue throughout the session," he said.