IBJOpinion

FEIGENBAUM: Expect uncertainty in the 2010 General Assembly

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One certainty about the 2010 session of the Indiana General Assembly: It will be over by mid-March.

That, however, may be the only predictable element of a session that convenes during the most turbulent and unpredictable economic times this state has endured in decades.

As a result, this gathering likely will prove to be a united and uncontroversial meeting of the minds—as both parties coalesce to pass politically popular proposals that will do no harm, postponing their tough decisions until after the election (while forcing the governor to be the bad guy). Or they will jump in and make difficult choices that will allow the state to survive the economic straits and preserve legislative prerogative in spending decisions.

Today, our money is on the former.

December offers a peek at promises and priorities as the legislative schedule again opens a month early. The agenda features a bevy of committee hearings in both the Senate and House of Representatives aimed at expediting packages considered sufficiently important that legislative leaders deem calendar creep essential.

Many Democrats finally seem to be warming—at least politically—to adding property tax caps to the Indiana Constitution, but seek protection against “assessment creep” in a trailer bill. Serving up too many restrictions on assessed values, however, also could pose constitutional problems and further hamper provision of local government services.

And while some business interests are softening their previous opposition to the tax caps, that sentiment is universal, and the state’s agricultural community remains largely averse to how application of the circuit breaker affects Hoosier ag.

Expect a few more prominent issues, some important to business, and some not, to be the subject of some debate—or debate over why they will not be debated.

While a legislative interim study committee completed its two-year review of the state’s alcoholic beverage laws and recommended adherence to the status quo, there remains considerable pent-up demand for some changes. Recent administrative and legal action may offer additional impetus.

The state’s casino industry—a direct employer of some 14,000 and a major contributor to state coffers—is at a crossroads, facing coming competition from Ohio and possibly Kentucky. The racinos seek tax relief; some casinos want tax incentives for non-gambling economic investments, income tax credits against the wagering tax, or tax deferral on some free-play offerings.

Another interim study committee examined gambling issues and found it difficult to achieve consensus on equitable assistance, as each property seems to face its individual challenges and would be affected differently by universal solutions. Tax breaks are not politically palatable, a casino move is a tough sell, and the only legislation that might emerge could center on allowing land-based gambling at current riverboat sites or simply eliminating maritime requirements and crews. However, any time a gambling issue comes to the floor, things become complicated.

Township-government reform efforts also will return.

Other emotional issues, such as smoking bans and prohibitions on texting while driving, will inevitably arise and distract lawmakers.

We’re just jaded enough to believe that much of the session’s direction will not be evident until close to Feb. 19, the deadline for filing for legislative office. The 2010 election for the Indiana House of Representatives is acknowledged to be the most important of the decade, because Democrats need to maintain their majority to affect the drawing of new district lines in 2011.

Both parties believe their respective ability to “draw the maps” will largely determine which party will be able to control the House majority for the succeeding 10 years (when Republicans drew the House maps in 1981, they held the majority for all but one election in that decade; likewise, Democrats were in charge of House mapmaking in 1991 and 2001 and maintained their majorities in all but one election in each of those two decades, to date).•

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Feigenbaum publishes Indiana Legislative Insight. Views expressed here are the writer’s.

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  1. Apologies for the wall of text. I promise I had this nicely formatted in paragraphs in Notepad before pasting here.

  2. I believe that is incorrect Sir, the people's tax-dollars are NOT paying for the companies investment. Without the tax-break the company would be paying an ADDITIONAL $11.1 million in taxes ON TOP of their $22.5 Million investment (Building + IT), for a total of $33.6M or a 50% tax rate. Also, the article does not specify what the total taxes were BEFORE the break. Usually such a corporate tax-break is a 'discount' not a 100% wavier of tax obligations. For sake of example lets say the original taxes added up to $30M over 10 years. $12.5M, New Building $10.0M, IT infrastructure $30.0M, Total Taxes (Example Number) == $52.5M ININ's Cost - $1.8M /10 years, Tax Break (Building) - $0.75M /10 years, Tax Break (IT Infrastructure) - $8.6M /2 years, Tax Breaks (against Hiring Commitment: 430 new jobs /2 years) == 11.5M Possible tax breaks. ININ TOTAL COST: $41M Even if you assume a 100% break, change the '30.0M' to '11.5M' and you can see the Company will be paying a minimum of $22.5, out-of-pocket for their capital-investment - NOT the tax-payers. Also note, much of this money is being spent locally in Indiana and it is creating 430 jobs in your city. I admit I'm a little unclear which tax-breaks are allocated to exactly which expenses. Clearly this is all oversimplified but I think we have both made our points! :) Sorry for the long post.

  3. Clearly, there is a lack of a basic understanding of economics. It is not up to the company to decide what to pay its workers. If companies were able to decide how much to pay their workers then why wouldn't they pay everyone minimum wage? Why choose to pay $10 or $14 when they could pay $7? The answer is that companies DO NOT decide how much to pay workers. It is the market that dictates what a worker is worth and how much they should get paid. If Lowe's chooses to pay a call center worker $7 an hour it will not be able to hire anyone for the job, because all those people will work for someone else paying the market rate of $10-$14 an hour. This forces Lowes to pay its workers that much. Not because it wants to pay them that much out of the goodness of their heart, but because it has to pay them that much in order to stay competitive and attract good workers.

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  5. It is sad to see these races not have a full attendance. The Indy Car races are so much more exciting than Nascar. It seems to me the commenters here are still a little upset with Tony George from a move he made 20 years ago. It was his decision to make, not yours. He lost his position over it. But I believe the problem in all pro sports is the escalating price of admission. In todays economy, people have to pay much more for food and gas. The average fan cannot attend many events anymore. It's gotten priced out of most peoples budgets.

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