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STATEHOUSE DISPATCH: Slow-moving lawmakers have an economic upside

February 20, 2006

Is the wall finally crumbling? After years-or decades-of assiduously avoiding certain issues because they were so fraught with controversy, lawmakers now seem to be tackling them ... and, at least in some cases, are finding their actions are met with a collective public yawn.

Last year, spurred by Gov. Mitch Daniels, legislators confronted the controversial matter of daylight saving time, long considered the last "third-rail" issue of Hoosier politics and policy. The issue had not even been debated in recent years over bipartisan concerns that legislators would be burned by even considering the topic.

Then, amid considerable heated public comment (which continues to this day), DST proponents eked out a one-vote win in the House after more than one try.

This year, two issues that have lingered for years have also re-emerged and appear headed for resolution.

While telecommunications deregulation has not been a huge public hot button among all constituencies, lawmakers have proven reluctant to address the issue due to intense industry lobbying on all sides, their own lack of technical understanding of the components, realization that the Indiana Utility Regulatory Commission and Office of the Utility Consumer Counselor were there to weigh industry and consumer interests (and insulate lawmakers), and concern that the changing markets and federal regulatory scheme might undermine or counteract any state action.

But the time was apparently right in 2006, as both the House and Senate continue to advance comprehensive deregulation measures, and the state is poised to adopt a version that would radically alter the regulatory structure-with virtually no public controversy, despite the assault of television and radio advertising by assorted industry interests seeking public support for their respective positions.

Also quietly proceeding through the legislative process is a measure that would change the state fireworks law, which theoretically regulates the purchase and use of so-called "illegal" fireworks. For many years, the state fire marshal's office has opposed loosening of the law, and has aggressively defended (and tried to extend application of) the current law-on the streets, in the Statehouse, and in the courts.

In practice, however, sales of the fireworks in question have been handled by sellers with a wink and a nod, embraced by the Hoosier populace, and reinforced by an active industry political and lobbying presence.

This year, legislation to legalize much of what has been technically prohibited is proceeding further and faster through the process than ever before, and is occurring with the backing of State Fire Marshal Roger Johnson, who has his eye on proposed new registration fees for fireworks vendors and user fees for purchasers. Those proceeds would largely be directed to a statewide firefighter-training fund.

So issues that had been extremely controversial over the past decade or two are fading away, as lawmakers are left to ponder whether there really are any true nontax, third-rail issues left to ponder (at least other than local government reorganization).

What this also ties in with is the political stability of the state, and this is important for economic development purposes.

An old saw around the halls of the Statehouse is that lawmakers are never quick to approve a major piece of legislation the first time they are confronted with it. Rather, they prefer to send it to an interim study committee for review. The next time it arises during a session, they may still be reluctant to proceed on policy or political grounds, but then the attitude seems to change the longer a concept hangs around the halls.

After a few sessions, ideas once considered novel-or politically unnerving-become unremarkable, and some lawmakers even question why action hadn't been taken before. Ultimately, many of these bills pass.

And that illustrates a key point. Certainty and stability are key to investment and expansion interest on the part of any industry. No entity wants to locate in a jurisdiction in which all the assumptions change soon after they sign on the dotted line.

That is what makes Indiana more attractive than other states in which there may be radical change-even beyond simply which party is in control-in the governor's office every four years or in the Legislature every two. Indiana simply does not enact major public policy and tax changes on the fly, regardless of which party runs things.

The most recent example of how this can pay off may be in looking at the more than $1 billion in new and expanded investment by Indiana's casino industry over a three-year period-as lawmakers avoid imposing new casino taxes and approving new forms of gambling.

While Hoosiers may grumble about things not getting accomplished, or about partisan gridlock preventing change, radical change on a rapid timetable may sometimes prove counterproductive for a state seeking to improve its economic development position.



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