Government

STATEHOUSE DISPATCH: Key issues all entangled as Legislature heads to wire

April 23, 2007

Longtime readers of this column will recall how we traditionally analogize conference committee time to the NBA playoffs, and compare some of the legislative players to Indiana Pacers great Reggie Miller in the closing minutes of a finals game.

With Reggie retired and the Pacers out of the playoff picture this year, those analogies don't seem quite so appropriate.

But we still can talk some hoops.

A sage Hoosier native, speaking about a tradition sacred to generations of Hoosiers, once said something particularly profound that is worth recalling as we head into the black hole of conference committee deliberations. Legendary basketball coach John Wooden would tell his players, "Do not let what you cannot do interfere with what you can do."

And while he might have been suggesting that people as vertically challenged as Republican Gov. Mitch Daniels or Democratic House Speaker Pat Bauer, South Bend, not build their game around dunking from the post, we think Wooden's message for those trying to reconcile the slots at the track, property tax relief and budget measures would be to concentrate on areas of agreement, don't overreach for revenue, and don't try to be all things to all people.

That might be problematic, however, as conferees wrestle with the dynamics of making these three wholly interdependent measures mesh.

The first piece that must fall into place is the slots-at-the-track bill. The upfront revenue from the licensing fees is critical to the success of the property tax reform bill, but the fault lines are emerging between the House and Senate over the license fees: $100 million per track as proposed by the House, and $400 million per track as approved by the Senate.

There are questions about the tracks' ability to raise that kind of money in today's markets in a short time frame, but the Senate needs that $800 million to make the property tax bill work, or it must be scaled way back. And the governor might not be willing to stick his neck out and sign a bill that grants the track a slots franchise at a level much below $400 million from each.

There is also a deeper divide. Key House Democrats want to treat slot revenue as "found" money instead of as a source of funding for the state's basic responsibilities-including property tax relief-without exploring other alternatives.

There continues to be a difference of opinion between the House and the Senate on revenue sharing. The 35-percent chunk set aside for counties without gambling by the House was parceled back out for property tax relief by the Senate. But the revenue-sharing component was a key element in getting several of the 54 votes that the slots bill was able to garner in the House. Without that money flowing to counties that believe themselves to have been stepchildren of sorts in the state's rush to gambling, some House members representing those areas might be reluctant to approve the bill a second time.

But this poses an additional problem: The governor might be reluctant to approve expanded gambling if the revenue is to be used for any purpose other than property tax relief.

Once lawmakers get past the slots-atthe-track issue and begin to address the property tax relief package, they will find an incredibly complex measure with which no one will be entirely happy. Mayors in particular aren't happy with the lack of local government funding options they have sought, and others are also skeptical that HB 1478 will solve all the problems without creating new ones.

Some recall the lack of attention to the implications of the circuit breaker when that property tax relief legislation passed a few years ago, and the problems are now coming home to roost (except for individual homeowners). Similarly, one of the more attractive features in the measure, the sharp increase in the homestead deduction, is starting to get some notice. Others are concerned that this will remove more assessed value from the property tax rolls, while shifting the tax burden to owners of higher-valued property, to farmers and to businesses.

On top of all this is the need to construct a biennial budget, a task made a shade more difficult by the new forecast that finds revenue through the end of this fiscal year down $23 million from the December estimates, and the next two years off some $130 million from the estimates just one quarter ago. That means about $150 million less in cash will be available to lawmakers for spending in the biennial budget they are now shaping.

We started this column talking about hoops. Now you can see how many hoops of a different nature lawmakers must jump through before April 29 on just these three measures.



Feigenbaum publishes Indiana Legislative Insight. His column appears weekly while the Indiana General Assembly is in session. He can be reached by e-mail at edf@ingrouponline.com.
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