[r24] One Year Short and Millions of Dollars Too Big (2/20/2009)

Friday, February 20, 2009

Start Date: 2/20/2009 All Day
End Date: 2/20/2009

Every other year, the Indiana General Assembly is charged with one job - create a balanced budget. For House Republicans, the job is not a success unless we can pass a budget that provides all the necessary services Hoosiers expect without spending us into oblivion or raising general taxes.

Under the Indiana Constitution, the House is where the budget begins, which means our House Ways and Means Committee is very powerful and very busy during a budget session.

However, as is the case in every committee, the majority party calls the shots. It determines which bills will be heard and which won't. It determines what will be added and removed from legislation. Often, it can force legislation through the House or Senate without a single vote from the other party.

And, in the case of the House Ways and Means Committee, it means the majority party pretty much determines the budget for the next two years.

This year, that could be very bad news for Hoosier families. On Friday, the House voted to pass the budget by a vote of 52-44.

In its current form, the budget (House Bill 1001) is in terrible shape for many reasons.

1.      It's a single-year budget. This is an unprecedented move on the part of Democrats. They say it's because of our poor economic standing; they want a one-year budget to compensate for what may come next year.

This is a bad move for a couple of reasons. First, the budget-making process is complicated enough as it is. Moving to a single-year budget will only reduce the existing transparency. Also, a one-year budget means we'll have to write another budget next year, in a short session.

Essentially, this opens the door to the possibility of a full-time legislature, a terrible idea for any voter who values a citizen legislature over the prospect of a Statehouse full of professional politicians.

2.      It spends way too much. In its current form, the budget appropriates $324 million more from the state's general fund in 2010 than was recommended by Gov. Mitch Daniels. It would reduce our reserve balances to a mere $451 million in 2010 once all the extra spending is accounted for. The governor's budget would have left more than $1 billion.

After all the good work the General Assembly has done to bring the state back into the black financially, this budget would put our general fund more than $195 million in the red. If we continued to spend at the same rate in 2011, we could be looking at less than $161 million in reserves before 2012. That equals about four days of state spending.

3.      It reduces oversight of state spending. This budget would severely reduce the powers and oversight abilities of the Commission for Higher Education, the agency that monitors spending by state universities. It also allows these universities and other state entities to bypass review by the governor, budget director and the State Budget Committee in spending your tax dollars.

4.      It could result in property tax increases for many communities. That's right. Contrary to promises made last year with caps on property taxes, this budget could allow property taxes to increase, anyway. This is because it expands school corporations' ability to pay for utility and insurance expenses from the Capital Projects Fund, because it would allow schools to circumvent the cap.

Clearly, House Republicans are not proud of this bill or the economic mess it could drive us into if big changes aren't made before its final passage in late April.

From here, the budget moves to the Indiana Senate Appropriations Committee. Most of us hope the many kinks in this budget will be smoothed out there. We cannot afford a bad budget in times such as these.

As always, please contact me with questions or comments. Send letters to me at the Statehouse, 200 W. Washington St., Room 401, Indianapolis, IN 46204. E-mail me at H24@in.gov, or call me toll-free at 1-800-382-9841.