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May 2, 2009

Legislators express frustration at crackerbarrell

Kersey: ‘I don’t know what this governor wants’

By Brian M. Boyce

TERRE HAUTE — It was a crackerbarrell session that wasn’t supposed to have been, and local legislators say Gov. Mitch Daniels is to blame.

“I don’t know what this governor wants,” Rep. Clyde Kersey, D-Terre Haute, told constituents Saturday morning in the Vigo County Public Library.

When asked how he felt at 11:59 p.m. Wednesday as the deadline to reach a state budget came and went, Kersey said, “disappointment and frustration are the two words I would use.”

As the state failed to approve a budget by April 29, the legislature will most likely reconvene for another session in June, officials said at a re-cap meeting that would have been unnecessary had the budget passed.

Kersey recalled going back for two additional sessions in 1997, and Rep. Vern Tincher, D-Riley, remembered back to 1993 when the budget wasn’t approved until June 30.

But if the budget isn’t passed by July 1, real problems can occur, Tincher said, noting it’s plausible that all state funds could be frozen, be they for public schools, universities, the Bureau of Motor Vehicles or other agencies.

What stands in the way of an approved budget is about $100 million the governor wants placed in a “rainy day fund,” Kersey said. And the most direct path to at least $84 million of it lies within Indiana’s public school system.

“This is just so bad,” Kersey said without restraint. “Building up a rainy day fund on the backs of public schoolchildren.”

Tincher said there is about $710 million in reverting funds, money the legislature approved for spending last year the governor didn’t use. Tincher said legislators want these funds to go toward education and healthcare, but the governor wants them put into the reserve funds. The governor also wants no capital projects undertaken at state universities, Tincher said.

An audience member asked if it’s not raining now, when will it.

The legislators agreed, citing dire economic times and low tax revenue as part of the problem.

“I don’t anticipate better revenue figures in the next two months,” Tincher said, noting revenue shortfalls and the fear of more are driving many of the budget cuts.

Sen. John Waterman, R-Shelburn, said the budget submitted and ultimately rejected was one of the first he actually approved of in 14 years. “When we go back it’s going to be a leaner budget. Education’s going to get cut. There’s no doubt about it,” he warned.

And on issues of unemployment, social services and overall economic conditions, legislators were sour overall with the current administration.

Currently the state owes the federal government about $750 million in funds borrowed to pay the unemployed, Kersey said, adding the debt will grow to at least $1 billion by the year’s end.

“If we can’t reach an agreement on unemployment, then the feds will step in,” he said. “We have to pay them back. I don’t think they’re going to forget about us.”

Tincher said the avalanche, which has been growing from $300 million since the fund went red around January, has been a long time coming.

The fund had a $500 million surplus about 10 years ago, at which point the state decided to spend it down by reducing the payroll taxes paid by businesses and increasing payouts. “That’s when it started going downhill,” Tincher said.

And fraud and bureaucratic malfunctioning have added to the problem.

Tincher referred to a contractor who has contacted him regarding three employees drawing unemployment off his account while still working for him.

Despite reporting this to state officials and Workforce Development, nothing has been done and the gainfully-employed workers are still receiving unemployment, Tincher said. “That’s how efficient they are,” he said in reference to Workforce Development.

Waterman said legislation barring benefits for employees fired for alcohol or drug-related offenses, along with stopping large automotive plants from helping employees get unemployment during regular plant shut-downs, should save considerable money.

“There’s about $200 million in savings right there,” he said.

But as it stands, businesses will bear the brunt of the issue as unemployment payoffs remain about the same and the taxes employers pay into the fund increase, all said.

“There has to be a balance between how much business pays in and how much benefits are paid out,” Sen. Tim Skinner, D-Terre Haute said, noting businesses conceded quite a bit on their end.

Murial Ryan of Families By Choice, works with the homeless in the Wabash Valley, and said social services agencies such as Workforce Development and the Family Social Services Agency are doing an abysmal job.

“I’m highly concerned that as a taxpayer I’m paying for truly lousy service,” she said, citing examples of a male client being informed by the state that he “is pregnant” and another client being wrongly informed that “she’s in prison right now.”

The state’s privatization of social services by IBM has led to disaster, she said, voicing her anger at the company’s 10-year contract without a performance clause.

Kersey said the current administration brags about the reduction in Hoosier food stamp recipients, but this reduction came about because recipients can’t access the program.

“The state doesn’t save a dime by not giving people food stamps. That’s a federal program,” he said, adding that without food stamps, the recipients just go to Catholic Charities and other food banks and drain them. “They’re running out of food down there.”

Tincher said the FSSA is too big to manage and said IBM has been kicked out of other states for similar problems, but the 10-year contract Indiana has means they’re here for a while regardless performance.

“This company doesn’t care if they roll over into the other counties or not. They get their money either way,” Kersey lamented.

In the meantime, officials predict the economy will continue to worsen, and Daniels will continue to cut the budget at the expense of schools and rural health programs.

“It’s going to be our resolve against the governor’s resolve,” Kersey said. “I’ve been through these things before and it’s whoever blinks first,” he added, predicting the end result will be a “very bad budget.”



Brian Boyce can be reached at 812-231-4253 or brian.boyce@tribstar.com.

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