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March 4, 2010

Lawmakers race toward tentative adjournment

Deadline was midnight Thursday

By Mike Smith Associated Press Thu Mar 04, 2010, 10:28 PM EST

INDIANAPOLIS — Indiana lawmakers were trying to strike deals on some major issues Thursday as they raced toward a tentative midnight deadline for adjourning the 2010 session.

Democrats who control the House and Republicans who rule the Senate appeared close to a compromise that would allow schools to shift money from property tax funds to help offset $300 million in budget cuts in general operating expenses.

But that wasn’t completely settled, and there are still partisan differences on measures dealing with unemployment insurance tax increases and tax breaks and incentives designed to create jobs.

Lawmakers hoped to adjourn by midnight, days before a March 14 statutory deadline for finishing business. But it wasn’t clear whether legislative leaders would hold firm to their earlier, self-imposed deadline for adjourning. It appeared possible that the session would spill into today.

One compromise Democrats offered would allow schools to use up to 5 percent of their capital project accounts to help offset at least part of the $300 million in budget cuts in instructional money that Gov. Mitch Daniels imposed because of the state’s declining revenues.

But Senate Republicans also wanted to allow schools to use up to 10 percent of property tax funds to offset the cuts so teachers would not be laid off. But for schools to get that higher percentage, they could not give teachers pay raises next year except for so-called step increases that provides more money for many teachers for each additional year of experience.

“It’s got to have both options in it — the 5 percent and the 10 percent,” said Sen. Ronald Alting, R-Lafayette.

But such a compromise on that issue passing could depend on legislation that would delay increases in taxes that employers pay into the state’s unemployment insurance fund. Lawmakers passed the increase last year as a way to start shoring up the fund, which has borrowed $1.6 billion from the federal government to remain solvent.

The tax increase slated to take effect in April would cost employers an additional $360 million in taxes. Republicans want at least a one-year delay, saying an increase this year would force businesses to lay off workers in a still struggling economy.

The House passed a bill that would repeal the tax increase. But Democrats included provisions that would crack down on employers who misclassify workers as independent contractors to avoid paying jobless premiums, expand eligibility for benefits in order get $148 million in federal stimulus dollars for the fund, and increase weekly maximum benefits.

Republicans say the expanded eligibility and increase in maximum benefits would end up costing tens of millions of dollars, further depleting a bankrupt fund.

Sen. Brandt Hershman, R-Lafayette, said Thursday afternoon that high-level negotiations on the issue were continuing, but sticking points remained.

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Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Indiana Legislature

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