Lawmakers were treated Jan. 18 to what Hoosiers have quickly become accustomed to seeing from the new governor: a well-conceived strategy perfectly executed.
Gov. Mitch Daniels, a Republican, delivered a compelling State of the State address, reminding the audience at the Statehouse-and in living rooms in all 92 counties-of the marching orders they gave him in November. He detailed the daunting but not insurmountable short-term problems Indiana faces, and outlined how bright he believes the future can be in just a few short years-if he is given the tools he needs.
While stylistically he did well, the speech itself was short on details. Sure, he mentioned something about keeping education spending in line and earned the requisite applause from slamming allegedly wasteful education construction. He called for wealthier Hoosiers (like two-teacher couples!) to dig deeper at tax time-one time-to bail out a previously profligate state government. And he did it without giving lawmakers an early peek at the speech.
Even on the afternoon of the speech, influential Republican senators-who had not yet been briefed on their new leader’s intentions-were still suggesting more spending cuts were in order and more months should pass before talk of any tax hikes.
The next day, the governor’s team released details, and people understood what was at stake.
Cutting the Medicaid growth rate by half will be difficult and painful. Changes in eligibility has one ring when spoken about generically and another entirely when the person whose eligibility has changed is a family member, neighbor or someone whose sad story is beamed into your living room on the TV news.
When Daniels referred to beginning “Indiana’s journey away from property taxes, by freezing the state’s subsidy of local property taxes,” people didn’t necessarily realize he was referring to the Property Tax Replacement Credit homeowners and businesses receive. That was a key component, perhaps a quid pro quo, in the passage of the historic tax restructuring package 2-1/2 years ago.
The credit program was, interestingly, an entitlement as Medicaid is, but it rankled some Democrats because it offered the same percentage credit to a Reggie Miller on his multimillion-dollar Geist home, for example, as to an infirm elderly Hoosier with a $40,000 home.
And it sounds great to cut spending on school construction, but many rural and urban districts have deteriorating facilities and real needs. What’s next is a huge selling job.
You may have noticed during the cutaway shots on television that the applause principally came from the GOP side of the aisle, even on the less controversial aspects of the speech.
Asked afterward if his Democratic colleagues would, as requested, set aside politics and offer some votes for the proposals, one Democratic representative questioned how many Republican votes the governor could muster.
Recall that even Republican lawmakers were saying just before the speech that it was too early to talk tax hikes. Democrats were saying the same thing.
Some Hoosiers also questioned why Daniels didn’t hold off a year on taxes to see if his spending cuts and economic revitalization moves would suffice.
On a different note, however, some lawmakers may be reluctant to support only a temporary tax hike, figuring that if they have to take the heat for raising taxes-period-it might as well count for something more than merely bringing us back to level fiscal ground.
Some lawmakers, especially some Democrats, see the Daniels request-despite his vow to veto any tax hike that would be greater, more extensive or last longer-as an opportunity to fund other initiatives that have been forgone over the years. Things like full-day kindergarten or free textbooks. They are scheming how best to achieve this. Some also see an opportunity to render the tax structure less regressive.
Others may simply feel more comfortable with a tax that doesn’t merely patch a hole, but ensures the hole doesn’t reemerge or get deeper.
There is plenty of time between now and April 29 for debate-and the changing of hearts and minds.
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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