Mitch Daniels and Legislature and State Budget and State Government and Government

FEIGENBAUM: History suggests legislators finally will settle on budget

June 29, 2009

Concerned about what the state-of-state budget negotiations mean for you? Don't fret too much.

Unless you are directly affected by state appropriations (you know, cash directed toward education, public safety, public health, economic development and the like!), or your last name is Simon or Irsay, you have little reason to worry.

As IBJ went to press, negotiators from both major parties and both chambers were trying to settle on final details of the fiscal years 2010-2011 biennial budget, but still seemed far apart (at least rhetorically).

Yet when it comes to budget process and substance, things are never quite as bad as the minority tends to portray them. Nor are they ever as good as the majority wants you to believe. A good chunk of the budget drama is nothing more than Kabuki theater, played out according to a time-honored script in which each of the four legislative caucuses and the governor play their respective parts. Only if an unscripted element pops onto the stage, disrupting the flow of a given scene, will the actors diverge from their traditional roles.

Sure, it is trite to point to the almost 200 years of state budgets (with only two or three real disruptions over the centuries) as evidence that the process will always come to an appropriate conclusion and Hoosiers will continue to be served.

But the reality is that we'll have a budget of some kind. Even in the unlikely event that lawmakers abrogate their responsibility and do not agree upon a formal budget before the June 30 deadline, the Senate has offered a means to keep state government running (for what could amount to the entire biennium) with an unprecedented measure that would amount to a continuing resolution along the lines of which Congress has resorted to over the years.

While House Democrats became apoplectic upon introduction of the "fail-safe" initiative, no one wants government "shutdown" without a budget. Despite the rhetoric and finger-pointing about some elements' wanting such a scenario so they can blame other branches or parties, legislators (particularly House Democrats) do not relish the prospect of Gov. Mitch Daniels' essentially having free rein of government and spending practices in the absence of a genuine budget.

Democrats don't want to see Daniels run state operations with a blank check of sorts in reverse: the ability to shut down programs and services he chooses, based upon his interpretation of what state law allows him to do (and don't look for Republican Attorney General Greg Zoeller to weigh in on the governor's powers and limitations without a budget until it becomes more than a hypothetical situation).

Negotiators will try to reach some compromises. Despite the rhetoric, the parties are not far apart in overall spending, and Senate Republicans seem to have a better understanding of Daniels' bottom line this time around. Sen. Luke Kenley, R-Noblesville, also has proven creative enough to find "off-budget" ways of funding longterm projects and redirecting funds to line items sought by House Democrats.

The sniping you've been hearing has really been just obligatory, but there are two areas of serious contention in the budget.

House Democrats remain firm on their preferred method of school funding, decrying Republican efforts to have dollars follow the student. Democrats are trying to protect urban and rural school districts with declining enrollments, while Republicans seek to help growing suburban districts cope with more students.

While some of the debate is truly about education, much is wrapped up in the Kernan-Shepard Commission reform recommendations about school district consolidation, and the governor continues to excoriate districts for spending too much money on buildings and administrators.

Also involved here is a policy disagreement on the appropriate role of charter schools. Democrats remain suspicious of Republican attempts to expand charter schools and particularly virtual charter schools.

Education funding—and policy—will be the thorniest budget issue, and will require some real compromises from both bodies. Expect the governor to at least grudgingly approve whatever the two sides agree upon here.

A fix for the Indianapolis Capital Improvement Board is proving elusive—even though Daniels and Senate President David Long, R-Fort Wayne, are pushing for one.

No CIB restructuring or rescue package has yet won the hearts and minds of the key elements that need to be involved. Out-state lawmakers remain largely unconvinced of the need for action and believe that, if they agree to help, their districts should get something in return. That then opens the door for gambling, the elephant on the legislative table, and all bets are off.

We're down to the wire—but don't be too concerned.•

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

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