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Activity at Statehouse picks up, but how much is getting done?

February 16, 2009

After a surprisingly slow month of January, the pace of legislative action picked up considerably during the first two weeks of February.

In just the last week, Hoosiers saw approval in the House of an unusually bipartisan state economic stimulus plan, a unique education-funding plan, and a painful fix for the state's insolvent Unemployment Insurance Trust Fund.

While this work was necessary to keep important pieces of legislation moving, the real question is whether true progress was made, or whether it was simply  "busy work" of sorts.

The economic stimulus measure was perhaps the most intriguing. House Bill 1656 started in the House Committee on Roads and Transportation as a hastily amended package of transportation projects that would have shifted some Major Moves priorities, jeopardized a chunk of federal funding, and directed serious money to projects nowhere near "shovel-ready."

Even Democrats recognized the overwhelming problems, readily accepting a Republican amendment on the floor of the House that appropriated $250 million annually over two years from the Bridge Fund, Equity Bonus Fund, Surface Transportation Fund, and federal stimulus bucks. That $1 billion would be deposited in a new Local Road Special Projects Fund and distributed to local road projects immediately.

After that amendment passed 99-0, Democrats, not to be outdone, offered their own $500 million amendment. It passed on a voice vote, adding that amount to the new Special Projects Fund from the ($550 million) Next Generation Trust Fund created with Toll Road lease revenue.

Republicans were not happy about taking funds from future generations, and questioned whether there is $1 billion worth of local work needed. Democrats insist that the boost is needed now.

With only 11 Republicans opposing it, the bill cleared the House, earning praise from both House Speaker Pat Bauer, D-South Bend, and House Republican Leader Brian Bosma, R-Indianapolis.

But Bosma acknowledged that the bill needs work in the Senate, and there will clearly be efforts made there to limit distributions from the Toll Road lease trust fund, even as the Senate considered a resolution to protect those assets by writing restrictions on their use into the Constitution.

There are also questions about whether the federal stimulus money will even be there as anticipated earlier this month. While the version that passed the U.S. House of Representatives contained $79 billion for states, the U.S. Senate effectively pared that down by half.

The education-funding measure passed the House on what was effectively a party-line vote, offering a one-year education budget outside the pages of the budget bill, both new concepts to this generation of lawmakers. Republicans are not happy with the large dip Democrats make into the tuition-reserve fund, suggesting this will require a tax increase soon.

Republicans in the Indiana Senate have serious reservations about the one-year aspect, as well as the funding aspects. The federal stimulus bill versions also vary in education funding, with the U.S. Senate eliminating $8 billion off the top, raising questions about the numbers in the state measure. Indiana House Democrats seem to shrug their collective shoulders and tell Hoosiers they've done their best.

Following several weeks of parrying between the Legislature and the executive branch, which followed a year of both sides avoiding the issue, House Democrats passed a proposal through committee to replenish the insolvent Unemployment Insurance Trust Fund.

Although both parties agree that the amount to be raised from the bill remains insufficient, they propose to raise by $2,000 the amount of an employee's salary on which an employer pays taxes into the fund; hike the tax rates, particularly for employers who are the biggest users; and impose a 0.3-percent employer surtax to help repay a portion of the interest owed to the federal government for loaning us cash to meet state obligations.

While the inevitable tax increase is now on the table, the Senate will be called upon to perform the heavy lifting on this bill. Look for the Senate to tackle the issue of restricting benefits and eligibility and revisiting the tax rates.

Not until the Senate gets involved will we see whether the House gets credited with an assist for its work to date.
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Feigenbaum publishes Indiana Legislative Insight. His column appears weekly while the Indiana General Assembly is in session. He can be reached at edf@ingrouponline.com.

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