FEIGENBAUM: Legislature heads toward bumpy conclusion

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OK, I admit that I’m still wincing about last week’s column about a peaceful, easy feeling in the General Assembly
as it approached the leadership-targeted early-adjournment date.

That column was written a day before House of Representatives Speaker Pat Bauer, D-South Bend, abruptly recessed the festivities
in his chamber just 75 minutes before the expected March 4 midnight adjournment, suspending full House activity until March

Bauer made a few obligatory attempts to pin the blame on Republicans’ being political about things, but his heart obviously
wasn’t in it. He simply seemed to believe that a shock to the legislative system would serve lawmakers well in reaching
resolution on the key remaining high-profile issue of the session.

Senate Bill 23 began as a measure intended to delay the 2009 increase in Unemployment Insurance Trust Fund premium fees to
ease the burden on most Hoosier businesses. But the parties quickly began to feud over what Democrats saw as anti-worker provisions
added by the Republican-dominated Senate and what Republicans saw as unaffordable job-creation initiatives piled on by the
Democratic-controlled House.

House Democrats further upped the ante by changing the UI fee-increase delay into a flat-out repeal, hoping this sweetener
would prove too attractive for Senate Republicans to vote against (and, indeed, it earned plenty of GOP votes in the House)
in an election year.

But both sides proved close to intransigent in conference committee negotiations. Efforts by Sen. Luke Kenley, R-Noblesville,
to allow Democrats to win some job-creation items (and credit)—which initially proved too much for his Republican colleagues
and too little to the Democrats to move them off the dime early in the week—fell into place by March 3. That left worker-misclassification
penalties (penalties for employers improperly claiming employees were independent contractors) the sticking point.

Negotiations were continuing as this column was being written, and hopes were high for resolution, given that the week opened
with none of the partisan animosity or personal grudges that might have been anticipated after Bauer’s surprise recess.

But even as other major matters were also pending final disposition, GOP leaders deemed the UI fee issue so important that
no other issues would be considered until a UI agreement was reached.

One big policy issue centered on education, and discussions ultimately centered on funding flexibility and the form and format
of the governor’s vaunted third-grade reading retention proposal.

The contour of the reading plan was resembling how it looked exiting the Senate: the State Board of Education would develop
a plan and, to the extent it resulted in a fiscal impact to either the state or the local districts, it would need General
Assembly approval. Compromise also appeared to fall into place on allowing school districts to tap local property-tax revenue
to compensate for cuts in state aid.

Flying under the radar was House Bill 1336, legislation dealing with public depositories. As more financial institutions
find their way on to formal or informal “watch lists,” and the amount of public deposits as a share of total deposits
increases, officials have become uneasy about just how protected public funds might be.

The measure in conference would, among other things, allow the state to set the assessment rate to be paid by depositories
as insurance on public funds whenever it deemed necessary, not just twice annually (but the rate still could not change more
than 2 percent in any six-month period). The proposal would also increase the limit on anticipatory warrants issued by the
state to pay immediate claims (when Public Deposit Insurance Fund assets proved insufficient to pay those claims) from only
$1.5 million to as much as $300 million.

Work was proceeding apace on functional consolidation of the Public Employees’ Retirement Fund and the state Teachers’
Retirement Fund, gubernatorially advocated efficiency measures that assumed new urgency this month as state finances deteriorated.
Democrats previously skeptical of cost savings resigned themselves to participation.

Lawmakers will be gone by my next column!•


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

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