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CHRIS KATTERJOHN Commentary: A word to the generally assembled

May 14, 2007

Like everyone else who's interested in these sorts of things, I have my opinions about the recently completed 2007 session of the Indiana General Assembly.

Considering how long it took lawmakers to get on track, they accomplished some reasonably important business when it got down to the wire. Aside from the all-important balanced budget, tops on my list is the 44-cent increase in the cigarette tax. It should've been higher, but this will do for a start.

For all you smokers who feel your rights are being violated and you are being picked on, that's just too bad. Your habit is killing people who don't smoke and forcing everyone's health insurance premiums and care costs to go up.

One of the effects of the latter is that some employers won't even look at Indiana for a new factory or expansion, according to my boss, Mickey Maurer. Mickey learned this firsthand when he was president of the Indiana Economic Development Corp., then head of the Indiana Department of Commerce. It's a fact.

The new money raised by the tax increase will be used to fund basic health insurance for more than 130,000 low-income, uninsured Hoosiers. So, smokers, your financial pain is for a good cause.

Another good cause is full-day kindergarten. Indiana-the whole nation, as a matter of fact-has to do a better job on education on the front end in order to compete globally.

Like the 44-cent cigarette tax, the $92 million earmarked to get the full-day program rolling on a voluntary basis is not enough, but it's a good start. And, it makes sense not to force districts that don't have facilities to take it on without proper planning.

As a fan of economic development, I was pleased to see the 21st Century Research and Technology fund continue with a $70 million appropriation and the venture capital tax credit renewed. Both of these tools are critical to enabling Indiana to compete.

Now for the not-so-good stuff.

Once again, our legislators called upon gambling to get them out of a financial bind, this particular bind being an unbalanced and unfair property-tax system that is a burden to many Hoosiers.

Mind you, I don't have a problem with gambling, which is a relatively safe and popular way to raise large sums of money for the state's work. I have a problem with the Band-Aid approach.

Legislators need to fundamentally change the property tax system, and judging from the hue and cry I've heard since the General Assembly adjourned, voters aren't going to let them forget this issue anytime soon.

Maybe in next year's short session, our representatives can agree on meaningful reform. They'd be wise to use the summer to study the issue further and come up with a sound plan.

The Legislature funded this year's model of "property tax relief" with a new wrinkle for the gambling industry. They said to horse-track owners, "Pay us a billion dollars and we'll let you put in slot machines."

That's a great idea for horse tracks because they just don't have enough business without them. But, I can't help but think it's going to hurt the casino industry. I think it will particularly hurt the new casino in French Lick, which by virtue of its isolated location was already at a distinct disadvantage. But here's my question: Just how much bigger can the market for gambling in Indiana get? My biggest disappointment this year was the collective failure of the Legislature to see the wisdom in Gov. Daniels' plan to turn the lottery over to private management in exchange for a minimum of $1 billion upfront and minimum annual payments of $200 million over 30 years. The governor had some good educational and economic development uses for that money that could've gone a long way in propelling the state forward. Again ... maybe next year.



Katterjohn is publisher of IBJ. To comment on this column, go to IBJ Forum at www.ibj.comor send e-mail to ckatterjohn@ibj.com.
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