TERRE HAUTE — With a June 30 deadline facing the Indiana General Assembly to adopt a new state budget, Gov. Mitch Daniels went on the offensive Wednesday during a visit to Terre Haute. His one message: Keep Indiana in the black.
Daniels is supporting the Republican-controlled Senate budget version, passed Tuesday. Now he is looking to put pressure on House Democrats to adopt that two-year, $28.5 billion budget. The House budget is a one-year plan that spends about $14.5 billion.
“If [House Speaker] Mr. [Patrick] Bauer, the boss of the House, has his way, then we will look like Michigan, California and other states within a year. We will be bankrupt and they’ll be back to raise taxes,” Daniels told members of the Terre Haute Chamber of Commerce, during a luncheon in the meeting facility of the Ohio Building.
“We won’t let that happen. We will not be blackmailed in bankruptcy or bullied into a tax increase,” the governor said.
Daniels said the state has a $1.5 billion loss in revenue, with state revenues down at least 8 percent. He said he wants a budget that keeps $1 billion in the state’s Rainy Day fund.
“A sobering thing to note is, even assuming, as our new forecast does, that things start to get better and revenue goes up in 2010 and up in 2011, we will have less money in 2011 than we did in 2007,” Daniels said.
“You are running your business with less money, less revenue on the top line, than you did four years ago. Yet, we have some legislators that don’t get it and want to keep on adding spending on money that is not there,” the governor said.
“Indiana’s unique situation as a solvent state in the black is in danger right now, but we can preserve it if a few lawmakers will act in a bipartisan way,” he said.
Daniels said he wants to preserve “education, public safety and child safety” in the state budget.
Rep. Clyde Kersey, D-Terre Haute, a member of the budget-writing House Ways and Means Committee, said no tax increase has been proposed by either the House or Senate budgets. (Democrats hold the House with a 52-48 majority, while Republicans hold a 33-17 majority in the Senate.)
Kersey said the governor has stated his budget calls for a 2-percent increase, but includes federal funds already designated for schools. “Those are federal funds we have never used in our budget. They used money for Title 1 and special education as part of the 2 percent. That can’t be used in the school [funding] formula, never has been,” Kersey said.
“In our budget, we put in a 2-percent average increase for all schools, and no school would receive less than they did last year,” Kersey said. “If you look at the governor’s proposal, it is actually a quarter of a percent [increase] on average. In his budget, 22 school corporations in the state will receive 20 percent or more [in increased funding], so you can see how that is skewed.”
Kersey said more funding, under the governor’s budget, would go to suburban schools in Hamilton County, Avon and Carmel, while rural schools and urban schools take a cut.
“Indianapolis Public Schools, if the governor’s budget and the Senate budget goes in, would cut funding for the IPS by $41 million,” Kersey said.
Kersey added that, based on a quarter-percent increase in funding for public education, “we calculate 4,000 teachers across the state would be laid off. That will hurt public education.”
Daniels said he supports a Senate action that would continue current state budget levels if the legislature fails to reach a budget agreement next week.
Rep. Vern Tincher, D-Riley, said the resolution is open-ended, unlike similar resolutions by Congress that are effective for 30 or 60 days. “It would allow the governor to operate for the biennium and there would be no need for the legislature. I think that is a terrible idea and I don’t believe Indiana should operate the way Congress does,” Tincher said.
Tincher said House members did not have time to review the Senate budget, which was presented just hours after its passage. The House wanted to review the budget in a joint conference committee.
“We have ample time to reach a compromise on the budget. No one gets exactly what they want, not the Senate, the House nor the governor. It is the art of compromise and that is not what the governor wants to do. He wants to dictate,” Tincher said.
“I think the House and Senate are closer to the people than the governor, and we will work out a compromise that will continue good government practices in Indiana,” Tincher said.
State Sen. Tim Skinner, D-Terre Haute, an advisory member for the Senate-House conference committee, said the legislature “just needs to keep our feet to the fire and get a budget passed.”
“The governor’s perspective is from a worse-case scenario. Realistically, you can’t say that what he is saying won’t happen, but what he is overlooking is how much of a surplus do we really need? He is locked into a $1 billion surplus, but why is that a magical number, why not $700 million,” Skinner said.
“He is trying to go out and garner some urgency here to get people to put pressure on their legislators to adopt his version of the budget,” Skinner said. “The House is saying ‘let’s not scare everyone to death, let’s be practical and work through this thing.’ and that is what is happening over here [in the Statehouse] right now,” he said.
“We are working on this [budget] process and I really think it will go right down to the wire, but I think it will be done,” Skinner said.
Howard Greninger can be reached at (812) 231-4204 or howard.greninger@tribstar.com
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