Monthly Archives: June 2009

Budget Approved; Shutdown Avoided

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The 2009 special session is officially over — finally — with a two-year state budget passed by the General Assembly.

After a lengthy process that seemingly left few happy based on the floor speeches in both chambers, enough of a compromise was reached to send lawmakers home and avert a government shutdown. The Senate voted 34-16 in favor, with the House approving it 62-37.

All but one of the Republican senators (Jean Leising of Oldenburg voted no) were joined by Democrats Lindel Hume of Princeton and Richard Young of Milltown. The House support came from all 48 Republicans and 14 Democrats.

Governor Daniels’ statement: "Like any compromise, this budget has its defects, but it meets the fundamental condition I laid down in January and every day since: to limit total spending enough to preserve our surplus and thereby protect taxpayers against the tax increases happening in virtually every other state."

Update: The governor proceeded to sign the legislation.

Crunch Time: Action from House Floor

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Mercifully, we’re nearing the end (hopefully).

Members of the House are currently taking turns on the floor voicing their opinions on the budget bill, which is expected to be voted on (relatively) soon.

Regarding the contents of this budget, Rep. Craig Fry (D-Mishawaka) says he’s embarrassed by it.  Rep. Vernon Smith (D-Gary) stated that Democrats were getting only “a teaspoon while Republicans walk away with a truckload.”  Still, not all Republicans were pleased.  Representative Mike Murphy (R-Indianapolis) voiced his concern that the budget didn’t do enough to help homegrown Hoosier companies, many of which he feared would be forced out of business.

Leading up to and including today, much of the wrangling centered on K-12 education – be it funding (districts vs. students), charter schools, the scholarship tax credit program or virtual schools. 

Indeed, Rep. Smith spent most of his floor time on this subject and denounced the education policies contained in the budget.  Like the vast majority of Democrats, Smith had wanted the K-12 dollars to continue to be awarded on a school district basis, while Republicans were adamant the money follow the students.  The problem with Smith’s argument: Large urban districts like Indianapolis and Gary continue to see declining enrollment.  To Rep. Smith, however, Gary is being “treated like a stepchild.”

Smith and many other D’s also still haven’t warmed to the idea of charter schools and see them – as well as the tax credits to allow for school choice – as a threat to traditional public schools. 

Meanwhile, Rep. Bob Behning (R-Indianapolis) pointed out that both the Gary and Indianapolis Public School (IPS) districts receive more funding per student than any other district in the state.  In fact, IPS gets nearly $2,300 more per student than the state average.

Later on, fiscal stalwart Rep. Jeff Espich (R-Uniondale) implored legislators to do the right thing and vote "yes" on the budget.  “We’ve all had our say; we’ve all had to compromise.  I think we’ve done the best we can do.  Anyone can find a reason to vote ‘no,’ but you can also find a reason to vote ‘yes’ … one reason being not having to raise taxes.”

Stay tuned for more …

States Eye Unclaimed Property for Additional Revenue

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Looking for ways to deal with greatly reduced tax collections, states are focusing on their unclaimed property statutes as a potential source of revenue. States are discovering that by changing their laws they can increase what escheats to the state coffers. Changes like expanding the definition of what constitutes "unclaimed property," shortening the period for owners to claim it and limiting recovery options result in more of the property going to the state (and less to the owners).

It is estimated that states collectively hold $33 billion in unclaimed property. Delaware expects to collect $380 million in 2009. So it is no wonder that struggling states are tempted to grab what they can in these disconcerting developments.

Going Down to the Last Day … Again

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Categories: Education, Special legislative session, Tax/Finance

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A supposed budget agreement on April 29, the last day of the regular legislative session, fell apart when barely a quarter of the 100 House represenatives voted for it. Let’s hope for better results Tuesday, when all 150 legislators will cast their votes on a budget compromise and plan to help Indianapolis’ Capital Improvement Board.

Key legislators worked behind the scenes, Gov. Mitch Daniels offered his insights and legislative caucus meetings were undoubtedly interesting. But as the budget bill was being printed Monday,  House members called it a day. While there were rumors of a Senate vote to come yet tonight, Democrats there opted to go home.

No complaints with either of those decisions. Rushed votes, without a true understanding of what is in the legislation, would likely lead to an unfortunate outcome. The state can’t really afford that.

Few details are known at this point, other than the core of the agreement being the Republicans’ two-year plan instead of the Democrats’ one-year proposal. How far the compromises went on education funding and other key issues is yet to be seen.

The good news is there is a bill to vote on, a step many have doubted in recent days. The uncertain news is in the details of the hundreds of pages of the proposal and what legislators will do tomorrow. It’s not the last day of the special session then, but the final opportunity to avoid a state government shutdown.

Good luck to all! 

John Stossel, Freedom Enthusiast

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Categories: Chamber News, Health Care

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If I were you, I’d go ahead and book my tickets now for the Economic Club of Indiana luncheon on October 6 at the Indianapolis Convention Center. The lunch will feature the musings of libertarian journalist/malcontent and winner of 19 Emmys John Stossel of ABC’s "20/20." Stossel, known these days as a champion of free markets (and owner of my second favorite TV mustache, next to that of PGA analyst Gary McCord), actually got his start as a consumer reporter.

Love him or hate him, he’ll probably make you think.

Here’s an excerpt from his blog today as he discusses ABC pulling his piece on health care reform in favor of more Michael Jackson coverage:

Here’s one blog comment, after I reported that ABC will hold my health care report in favor of more Michael Jackson coverage:

"Free market in action. See there Stossel? What’s not to like about that?
Posted by: jan | Jun 26, 2009 5:12:12 PM

p.s. Stossel. You’ve been hoisted on your own petard. Cheerio."

Jan is right. It’s the free market in action. 

Of course, maybe my bosses made the wrong choice.  Maybe more viewers would have tuned in for my health care report.  But the beauty of the market is that if they regularly choose wrong, they will go bankrupt. Networks better at giving the public what we want will take their business.   I’d rather have viewers vote with their remotes than have elites govern our choices, making sure we watch “serious” programming. 

Yes, I am sick of the coverage of Michael Jackson.  I hate it that ABC didn’t run my piece. Free markets sometimes encourage pandering to the masses. I still say, bless the market. The good outweighs the bad.

Free speech means rude obscenity and hate speech.  I treasure free speech too.

Drowning in Overseas Tax Proposals

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Categories: Business News, Tax/Finance

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The Indiana Chamber of Commerce is asking federal legislators to oppose the recent proposal to increase taxes on overseas profits. U.S. companies, including many in Indiana, will find it increasingly difficult to compete with their foreign competitors should these tax code changes be enacted.

American companies already pay the second-highest corporate tax rate in the world. During these difficult economic times, we believe economic development should be promoted to give our companies the tools they need to succeed in the global marketplace instead of burdening them with higher taxes. These tax proposals would add $200 billion to the tax burden of affected companies, putting them at a competitive disadvantage with their foreign counterparts who don’t have to pay or can defer taxes in their home countries.

Overseas investments by domestic companies strengthen our overall economy.  By adding overseas operations, U.S. companies create more opportunities for American companies to grow back home.  For every worker employed overseas by U.S. companies, 2.3 workers are employed in the U.S.

“Climate Change” Bill Passes U.S. House

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The American Clean Energy and Security Act of 2009 passed the House this evening, 219-212.

Here’s how Indiana’s Congressmen voted (See all votes here):

Democrats
Carson – Yes
Donnelly – No
Ellsworth – No
Hill – Yes
Visclosky – No

Republicans
Burton – No
Buyer – No
Pence – No
Souder – No

Hat tip to Hoosier Access for getting votes up promptly.

Indy Mayor Makes Case for CIB Funds

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Indianapolis Mayor Greg Ballard made his plea today before members of the budget conference committee for over $45 million in funding to rescue the city’s Capital Improvement Board (CIB).

According to Ballard, the CIB has a “three to four-year hump to get over.  We’re at risk until that point.”

At risk are major sports events such as the Big Ten basketball tournaments, the men’s NCAA Final Four, the 2012 Super Bowl and the convention center expansion.

Representative Terry Goodin (D-Austin) asked the mayor if his “proposal would take care of the board’s deficit or is it just another Band-Aid” – with more dollars needed down the road.  Ballard replied, “I feel pretty comfortable with this going forward…I don’t want to come back (for more money) – nobody wants us to come back.”

Ballard pointed out several times the connection of CIB activities to the entire state, referencing that the majority (60%) of traffic to the downtown sports facilities, Circle Centre mall, etc. is from out of town.

Though overall sympathetic to the mayor’s predicament, some registered displeasure that one area of the state would receive such significant financial attention.

Representative Bill Crawford (D-Indianapolis): “One of the caveats I’ve stated all along is that I support this, but by my own calculations, I can count only 21 legislators representing Marion County – and that’s a problem.  Other areas of the state have problems too.”

Crawford also encouraged his fellow legislators to keep the Indianapolis Indians baseball team in mind when looking at the mayor’s proposed increase in the admission tax, which he said could adversely affect the most affordable sports option for families,

Representatives Dennis Avery (D-Evansville) and Eric Turner (R-Marion) raised questions over Ballard’s proposed $2 million increase in the Professional Sports Development Area (PSDA) from $8 million to $10 million.  These additional funds would come to the CIB via the retention of more funds – as opposed to going into the state coffers.  These two legislators were concerned with how this would look to other cities like Fort Wayne and Evansville with professional sports teams but already receiving significantly less funding. 

Meanwhile, Rep. Jeff Espich (R-Uniondale) worried that helping the CIB “would open it up for others to try to fix gaming and other issues elsewhere ….we will be doomed if that happens.”

One voice of reason in all of this was Sen. Lindel Hume (D-Princeton), who seemed to be tired of hearing that no one outside of Marion County truly cared about the CIB funding woes. 

“I live in rural Princeton and I care.  The CIB represents a significant investment in future revenue for Indiana,” he notes.  “If we don’t do something, Circle Centre (mall) will close; we will lose dollars.  If we don’t do something, the conventions will leave; we will lose dollars.  This is as important as a large manufacturer to the state.”

But perhaps Rep. Cherrish Pryor (D-Indianapolis) made the best case for providing the CIB with the requested money.  “The state receives a much greater amount in return – roughly half a billion dollars – than what CIB is asking us for.”

It would appear then that some common ground must be reached and CIB funding included in the state budget, despite the shortness of time. (Crawford noted a bill must be printed by Sunday to present to the House.)

At Least They’re Not Messing with the Days on Task

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Education funding is always a contentious issue at the Statehouse, but the battle is rising to a new level this time around (as we have heard over and over and over). Past disagreements largely centered on the level of spending increases. With fewer dollars available, it’s a case of where are they going to go — to students or districts.

The budget is filled with education measures beyond the funding fight. One issue thankfully not on the table, at least for now, is minimizing the 180-day school year. Chamber education expert Derek Redelman reported it this way following the end of the regular session.

In recent months, we have heard from a new president, from a new secretary of education, from a film comparing Carmel students to those in India and China (see here) and from multiple other sources that American students spent far too little time in school. So it was a bit shocking to see at least six different bills filed this year that would have allowed Indiana’s school year to be shortened.

The Chamber fought these bills vigourously and most never even got a hearing. The one bill that did get a hearing was talked about by House Education Chairman Greg Porter (D-Indianapolis), who acknowledged that a reduced school year would be most harmful to the low-income students he represents.

Things all changed when Superintendent of Public Instruction Tony Bennett announced mid-session that the Indiana Department of Education would enforce current law and would no longer allow schools to count parent-teacher conferences and professional development days as student instructional time. He also announced much less flexibility in the waiver of inclement weather days. It was a decision backed by 20 years of Indiana law and one the Indiana Chamber applauded loudly, but it was also widely criticized by House Democrats, who vowed to block it through legislation. Though Rep. Porter offered the legislation intended to accomplish that goal, it ultimately failed.

Spending the Stimulus: $46 Billion Down, $741 Billion to Go

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How much of the stimulus money had been injected into the economy through the first 4½ months of the year? As of mid-May, about 6% of the money — $45.6 billion – had been paid out. Much of that went to Medicaid costs, unemployment benefits and the $250 checks to Social Security recipients. Highway projects had received $11 million. The Transportation Department had committed an equivalent amount, but the money has not gone out yet.

In all, some $88 billion had been committed to various types of projects and programs. The administration points out that it is a two-year program, but many state officials and others remain anxious. The administration has committed to spending 70% of the money, or $550.9 billion, within the first two years.

Vice President Joe Biden said in an interview recently, "I think that what you’re going to see happen here is the velocity of this will increase not just arithmetically, but geometrically here. At least, we’ve got to make that happen."