INDIANAPOLIS | State lawmakers approved a fix for Indiana's bankrupt unemployment system late Wednesday, but they are headed to special session after failing to pass a new state budget.
A two-year, nearly $30 billion spending plan went down in flames on a 27-71 vote in the House just minutes ahead of the midnight adjournment deadline. Democrats blamed Republican Gov. Mitch Daniels for forcing last-minute budget cuts without lining up GOP votes.
"He in my opinion negotiated in bad faith -- to the extent that he negotiated at all," Rep. Scott Pelath, D-Michigan City, said of Daniels. "He wants a special session."
The current budget expires June 30. Overtime will cost taxpayers about $12,000 a day in per-diems for the 150 members of the General Assembly, who began their regular session Jan. 7.
"It is far better that the Legislature try again than to have an irresponsible budget that I would have been compelled to veto," Daniels said in a statement.
Senate President David Long, R-Fort Wayne, said he would ask the governor to wait until at least next week to call lawmakers back to the Statehouse. The Senate approved the budget 37-13, with Sens. Earline Rogers, D-Gary, and Lonnie Randolph, D-East Chicago, among the no votes.
In the House, Reps. Mara Candelaria Reardon, D-Munster; Linda Lawson, D-Hammond; and Dan Stevenson, D-Highland, were the only region legislators to back the budget, which included the full $14 million requested to complete Little Calumet River levees.
"That was the primary reason," Stevenson said of his support. "Chances are with new revenue (figures) coming out we could end up with a worse budget (in special session)."
House Democrats and Senate Republicans appeared close to a budget accord Wednesday morning. But Daniels insisted lawmakers trim spending by at least $100 million, which would grow state reserves to $1.4 billion.
Even if Democrats supported the spending decree, House Speaker Pat Bauer's ability to pass the budget was jeopardized by a holdout from region lawmakers.
Rep. Charlie Brown, D-Gary, said as many as a dozen Democrats were prepared to withhold support unless leadership backed a plan to relocate one of Gary's two lakefront casinos. Lawmakers also left unresolved a push for local tax options to erase a $47 million operating deficit amassed by Indianapolis' pro sports stadiums.
Meanwhile, the unemployment fund fix passed the House on a 52-47 party-line vote and cleared the Senate 46-3.
"We think it's a very good balance between premium increases that are respectful of the economic situation businesses face," said Sen. Brandt Hershman, R-Wheatfield. "It also preserves benefits, and it provides significant reforms."
