State Budget and Government & Economic Development and Government

Republicans: Force state to live within means

September 15, 2010
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Republicans hoping to win control of the narrowly divided Indiana House said Wednesday that their chief goal during the 2011 legislative session is to make the state live within its means.

For Republicans, "living within means" is usually code for passing a balanced budget with no tax increases. But with Indiana facing a deficit that could top $1 billion in the next budget year, Republicans are tweaking their proposals.

House Minority Leader Brian Bosma, R-Indianapolis, said the state's next two-year budget doesn't have to be "honestly" balanced, meaning the state could spend more than it takes in by dipping into reserves if the economy continues to sag.

And while GOP House incumbents and candidates oppose general tax increases, they haven't ruled out a change to targeted taxes like those on cigarettes or gambling.

"These are tough times," Bosma said Wednesday during a press conference to promote the GOP agenda.

Democrats, who hold a 52-48 majority in the House, said the Republican plan left the door open for tax hikes.

"Indiana House Democrats have pledged not to raise your taxes," House Speaker Patrick Bauer, D-South Bend, said in a statement. "From today's events, it is clear House Republicans will be raising your taxes. We're just not sure which ones they will raise."

The GOP agenda calls for the expansion of tax credits to encourage new jobs and would allow schools to tie student performance to teacher evaluations. Bosma said Republicans would consider an immigration plan that could require people arrested to verify their immigration status before being released.

Bosma promoted the Republican plan as a specific package of pledges, compared to a Democratic plan released last week that's light on details.

"This is what we're going to do, not just what we're going to talk about," Bosma said.

All 100 seats in the Indiana House are up for election on Nov. 2.

Both parties acknowledge that passing a new budget without raising taxes would be a major challenge. State government is projected to end the current fiscal year June 30 with about $180 million in the bank. That's enough cash to run the state for about five days.

The Indiana Fiscal Policy Institute, a nonpartisan government research group, predicted last week that lawmakers and Republican Gov. Mitch Daniels could head into the next budget cycle facing a $1.3 billion deficit unless the economy drastically improves or deeper budget cuts are made.

Daniels already has cut spending by hundreds of millions of dollars, including $300 million from public schools and $150 million from higher education.

Rep. Jeff Espich, R-Uniondale, said the $1.3 billion estimate may be higher than the deficit Indiana actually faces and noted that lawmakers will get updated fiscal numbers in December before the legislative session begins in January. He said Republicans will find a way to pass a budget without using tax increases to do so.

"There are not going to be easy answers," Espich said.

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