INDIANAPOLIS | Northwest Indiana legislators headed home Thursday not knowing when they will be called back to the Capitol to address a bitter budget stalemate.
Emotions remained raw as Democratic House Speaker Pat Bauer and Republican Gov. Mitch Daniels met with reporters to discuss the spending impasse late Wednesday that will force the General Assembly into special session.
"This budget was utterly unacceptable all along," Daniels said. "I never had any other point of view, and it's a good thing that it failed because we have plenty of time now to deal with reality."
House Democrats blamed Daniels for sinking the budget on the final night of the four-month legislative session. They say he set a target of having $1.4 billion in state reserves when the new budget would expire in July 2011 only to later demand more spending cuts.
"Your word is everything," said Bauer, D-South Bend. "Once we reached the target, he changed the target."
Daniels said the main problem was House and Senate negotiators based their two-year, nearly $30 billion budget on an independent April 17 revenue forecast that already is off by $150 million.
"We cannot build a budget on fiction," Daniels said.
The governor also said the budget contained language that would have diminished his power to trim state spending, a claim that put him at odds with Republican Senate President David Long.
Both Bauer and Long, R-Fort Wayne, suggested the governor produce a new budget blueprint for lawmakers to work from when he calls them back to session.
Bauer suggested reconvening around June 15 -- two weeks before the current budget runs out. Daniels said he wasn't ready to propose a date.
All sides seem to agree that top lawmakers should work out an agreement ahead of time so that all 150 members of the General Assembly are back in session for no more than a week. A five-day session would cost taxpayers about $75,000 in lawmaker per diems and mileage reimbursements.
The Indiana General Assembly adjourned for the year late Wednesday without passing a new state budget. Lawmakers will have to return to the Statehouse for a special session sometime before June 30. Here is a look at where key Northwest Indiana initiatives stand.
Headed to the governor
IT INCENTIVES: Lawmakers sent the governor legislation designed to help Indiana compete for large-scale information technology investments.
Senate Bill 448, sponsored by Sen. Ed Charbonneau, R-Valparaiso, would allow counties and municipalities to waive property taxes on computers, fiber optic cable and other costly high-tech equipment. To qualify, a firm would have to invest at least $10 million and agree to pay an average wage at least 25 percent greater the average wage for the county.
The Northwest Indiana Forum lobbied for the proposal.
FORECLOSURES: Sen. Karen Tallian, D-Odgen Dunes, won final legislative approval for her attempt to help stem the tide of mortgage foreclosures.
Senate Bill 492 would require lenders to offer mediation to homeowners whose loans have fallen into default. The state-sponsored Indiana Foreclosure Prevention Network would assist in the nonbinding negotiations.
The legislation also would require lenders to pay a $50 court fee when filing a foreclosure, with the proceeds earmarked for mediation counseling.
NWI LABOR: Construction and manufacturing workers preserved their right to collect unemployment benefits during off-season layoffs, though their employer will pay higher taxes.
Gov. Mitch Daniels said he will sign the unemployment fix approved by lawmakers. But he said the legislation is light on reforms and doesn't do enough to address an $800 million structural deficit in the Indiana's unemployment system. The state expects to borrow up to $1.5 billion this year from the federal government and will have to repay the loan, likely with interest.
House Bill 1379 will raise about $315 million next year via higher employer taxes and $365 million in 2011. System reforms are expected to wring similar amounts in annual savings.
PUPPIES: Rep. Linda Lawson, D-Hammond, got a round of applause Wednesday night after the House unanimously approved her hard-fought legislation to regulate large-scale dog-breeding operations.
House Bill 1468, which cleared the Senate on a 44-4 vote, would toughen animal abuse laws and require commercial dog breeders to register with the state. The proposal would require breeders to offer dogs daily exercise and set other minimum standards of care.
Still in the mix
CASINO MOVE: Northwest Indiana lawmakers hope the looming special session gives them time to win support for a Gary casino relocation plan that irked legislative leaders in the final days of the regular session. Late-developing casino proposals always attract scores of gaming lobbyists seeking to swing last-minute favors for their clients.
The Gary plan calls for replacing one of the city's lakefront riverboats with a land-based casino near Interstate 80/94. Increased gaming taxes generated by the move would go to build a teaching hospital in Gary among other projects.
TRANSIT PLAN: Region legislators are after a revenue source to finance South Shore commuter rail lines to Lowell and Valparaiso and create a regional bus system for Lake and Porter counties. The plan stalled along with the Gary casino swap.
The current framework calls for creating a transit authority that could impose county income taxes of up to 0.25 percent to finance South Shore improvements in Lake, Porter. LaPorte and St. Joseph counties and manage a Lake-Porter bus system.
If the proposal is revived, it appears region lawmakers will be fighting to remove a proposed referendum that would let voters in the four counties decide whether to create the transit district.
CHARTERS: The budget plan that failed 27-71 in the House late Wednesday would have limited the establishment of new charter schools over the next two years to one per public school district.
The moratorium is a must for Rep. Vernon Smith and other Gary Democrats. They see the proliferation of urban charter schools as detrimental to Gary Community School Corp.
But state schools Superintendent Tony Bennett and Gov. Mitch Daniels, both Republicans, say the charter school limit could disqualify Indiana from up to $270 million in federal stimulus funding.
The issue has the potential to become a fierce partisan fight in special session.
The departed
SUNSHINE: House Democrats again vanquished an attempt to pry open the books of East Chicago Second Century, a casino-funded development group led by a former state Democratic Party chairman.
"Hoosiers have the right to know whether or not the gaming dollars intended for economic development were indeed steered for that purpose," Indiana Attorney General Greg Zoeller, a Republican, said in response.
Second Century, a for-profit company that has refused to divulges it finances, received $16 million in subsidies from East Chicago's riverboat casino under a 1994 agreement the city is seeking to void. The firm's principals include Michael Pannos, the former state party chairman.
House Democrats said lawmakers should leave the issue to the courts. But Sen. Frank Mrvan, D-Hammond, fumed after seeing his sunshine effort snuffed out for the third straight year.
SMOKING BAN: Rep. Charlie Brown, D-Gary, was unable to revive his push for a statewide ban on smoking in most public places. He said Senate Republicans wouldn't go along with a proposed ban that exempted casinos, horse tracks and off-track betting parlors.
COURTS: The Senate ignored legislation to add a $10 filing fee to Lake County court cases, which would generate nearly $800,000 a year to build a consolidated courthouse in Crown Point and potentially close courts in East Chicago, Gary and Hammond.
And an effort to expand merit selection of Lake County judges didn't get a hearing in the House. Lawmaker instead approved a bill to end merit selection in St. Joseph County and create a new Indiana Court of Appeals division.
Republican Gov. Mitch Daniels on Thursday said he had not decided whether the state needs three more appellate judges, whom he would appoint in July 2011. The expansion would cost taxpayers at least $2 million a year.
