FEIGENBAUM: Short session succeeded in doing no harm

The 2010 legislative session ended strangely: ahead of deadline, yet a week beyond the expected schedule, and the last full
day saw more mood swings among lawmakers than Indianapolis Colts fans experienced during the Super Bowl.

The response to this recession this year was not in the form of any revenue enhancements, but rather legislative acquiescence
to the governor’s cost-cutting; job creation was the top priority, particularly in the form of infrastructure programs
and some session-end job-creation incentives.

This was fated to be, as Gov. Mitch Daniels observed after the final gavel fell, a largely “defensive” session
that would do no harm.

While issues surrounding the Unemployment Insurance Trust Fund fee increase passed last year became the reason lawmakers
stayed longer, the resolution on the matter made both political parties happy, big business was pleased, and more jobs may
result from machinations that kept the UI fee-reversal measure alive.

The final UI package includes a one-year delay of the 2009 fee hike, authorizes an interim legislative study of the feasibility
and value of indexing unemployment benefits and the taxable wage base, offers some worker protections in the UI system, and
tasks the Department of Labor with reviewing the controversial worker classification (contractor) issue.

The UI drama on the final day was the bookend to the surprisingly bipartisan approval of a November statewide vote on adding
the statutory 1-2-3 property tax caps to the constitution.     But while this session merely helped the
state run in place fiscally, more tough decisions must be made in the year ahead.

Daniels made clear that he may be forced to make further cuts after Indiana remained “one of the handful of states
that only nicked, as opposed to gouged, education and didn’t raise taxes.”

Lawmakers again appeared to be willing to defer any further tough choices (read: cuts) to the governor in this election year,
even if some Democratic leaders publicly express wariness about what has been done to date and what they might expect down
the pothole-laden road.

Add in continued deterioration of the economy, the depletion of the $1.3 billion state budget surplus, and the absence of
some $600 million in federal stimulus funds used to shore up education spending, and the 2011 budget session looks to be the
most problematic in generations.

Most gratifying this year, of course, was that the session didn’t ultimately deteriorate into a partisan meltdown over
differences such as on school funding and job tax credits. In some sessions past, such issues might have spurred walkouts
or an excuse to engage in rank partisan activity that would kill other innocent pieces of legislation.

What was perhaps most interesting about the session was how job creation seemed to take precedence over partisanship and
even political philosophy. While leaders agreed that bills with a negative fiscal impact would not be heard, it almost became
a condition precedent for key bills to create jobs before they could advance.

Democrats had long fought Daniels’ privatization proposals, but resoundingly approved a public-private partnership
proposal that would pave the way for a private entity to pay the state upfront for the right to invest some $1 billion in
building the Indiana portion of the Illiana Expressway. Backers foresee some 30,000 new jobs and funds for other infrastructure
projects.

Along the way, a few other policy issues were decided.

Texting while driving, further Kernan-Shepard Commission local government reforms, utility net metering, a statewide public
smoking ban, and land-based casino authorization and racino tax equity failed to pass through the legislative sieve. But we’re
closer to ending social promotion of third-grade students and some state agency consolidation and reorganization will help
save tax dollars. Also, the governor will have to decide whether the right of employers to maintain safe workplaces trumps
the right of employees to keep locked firearms in their vehicles on company property. Tweaking of local school project referenda
laws also heads to the governor’s desk, as does the measure boosting safety of public funds on deposit with financial
institutions.

With little to gain in a session dominated by the lack of any available money, all sides seemed to win—and taxpayers
didn’t appear to lose any ground.•

__________

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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