Elected Officials and Legislature and State Government and State Budget and Elections and Government & Economic Development and Government

New GOP-led House will focus on private-sector job creation

November 3, 2010

With new control of the Indiana House, Republican lawmakers plan to pursue an agenda focused on encouraging the private sector to create jobs.

GOP House members will meet at the Indiana Statehouse on Wednesday to choose their leadership—an early step in advancing priorities that include passing a budget without tax increases and rolling out economic development incentives and education reforms.

Those efforts will be critical in an economic growth strategy focused on “getting out of the way of entrepreneurs” and “creating an environment for prosperity,” said State Rep. Brian Bosma, who is expected to be chosen house speaker by fellow Republicans.

“There are those who think the state creates jobs,” Bosma said Wednesday morning, “and then there are those of us who believe job creation comes from the private sector.”

Republicans captured at least 58 of 100 seats Tuesday to wrestle control of the Indiana House from the Democrats for the first time in six years. As of Wednesday morning, results for two House seats were pending, said Tory Flynn, spokeswoman for the Indiana House Republicans.

Republicans also gained at least three seats in the Senate to garner more than a two-thirds majority.

The power shift will make it easier for Gov. Mitch Daniels to implement an agenda that’s expected to include reforms in education and local government. And it will give the GOP control of redrawing congressional and legislative district boundaries, a tool that could help them retain control of the state for years to come.

Included in the House Republicans’ “Strengthen Indiana Plan” are measures such as enhancing state tax credits for businesses that rehabilitate facilities; giving local governments more leeway to offer tax abatements and providing high-performing teachers with merit pay.

“Keeping taxes low in this state is a critical element for job creation, (but) that alone will not do it,” Bosma said.

The state’s business advocates echoed that sentiment, particularly the need to pass the next budget without raising taxes.

“We need to get through this session and put in place a two-year budget for the state that doesn’t do harm to our ability to grow jobs and economy by raising taxes,” said Kevin Brinegar, president of the Indiana Chamber of Commerce. “Other states have raised taxes or are about to raise taxes, and they’ve not enjoyed the kind of job growth and economic prosperity that Indiana has.”

But some House Democrats raised concerns about a job-creation strategy that relies only the private sector. They won’t have much leverage to block Republican initiatives, though, as the minority party.

Rep. Bill Crawford, D-Indianapolis, said the federal stimulus is helping create tens of thousands of jobs in the state, although unemployment statistics haven’t backed that claim.

“There were a number of federal incentives that are going to create more jobs,” Crawford said. “You have to look at it on a case-by-case basis.”

Crafting a budget without tax increases will be a tall order for all lawmakers—and a task that could occupy a large share of the four-month session.

A September report from the Indiana Fiscal Policy Institute forecast state lawmakers would need to raise taxes, make spending cuts or both because dwindling tax revenue is expected to cause a projected $1.3 billion gap.

Though he wouldn’t discuss specific cuts, Bosma said balancing the budget without additional taxes would require “an examination of each area of the state budget.”

“A prioritization of programs and expenditures is going to have to be fundamental, with last choice for cuts being public education,” Bosma said. “It’s all going to be on the table.”

Brinegar said government efficiency initiatives, such as the local government reforms recommended in the 2007 Kernan-Shepard report, also could be part of the equation.

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