INDIANAPOLIS – There are lots of issues lawmakers want to address in the legislative session that begins Wednesday.
But only a few must be dealt with – crafting a new budget, drawing congressional and state legislative boundaries for the next decade, and trying, yet again, to address a busted unemployment insurance system.
These three topics likely will dominate the General Assembly, which runs through April. Here is a primer detailing the key elements of each debate:
The budget
The state’s 2-year budget ends June 30, and lawmakers must pass a new biennial spending plan before then.
Recent tax collection data show more growth than anticipated, and that should make the job a bit easier. But legislators are still dealing with revenue levels equal to those of five years ago. That means some cuts will need to be made – possibly as much as $500 million – and spending must stay flat.
“It’s definitely our biggest challenge,” said Senate President Pro Tem David Long, R-Fort Wayne. “We are going to have to find a way to do this without raising taxes and while still protecting K-12 education funding.”
A few areas of the budget grow automatically, such as the state’s pension obligations and the ever-increasing Medicaid program, which provides health care to senior citizens, people with disabilities and poor people. That means cuts and efficiencies must be found elsewhere to keep spending down.
Sen. Luke Kenley, R-Noblesville, the chief Senate budget architect and negotiator, said he is considering trimming optional services within Medicaid, such as chiropractors, podiatrists and adult dental services. But federal rules requiring “maintenance of effort” might knock that option off the table.
He said the state can’t cut Medicaid reimbursement rates for providers because they are already so low that the state has trouble finding doctors to participate.
Kenley also said the job of crafting a budget became easier when Republicans gained control of the House by a wide margin of 60-40.
“We start with a pretty similar budget philosophy, so the negotiations are much more narrow,” he said.
Gov. Mitch Daniels likened this budget to the one when he came into office in 2005, noting the first priority is to put the brakes on spending in the aggregate and prioritize within to safeguard education spending.
Democrats will have some say but don’t have the votes in either chamber to block Republican initiatives.
Redistricting
Communities of interest. Nesting. Minority districts.
These are a few of the catchphrases you will hear in coming months as lawmakers use new census data to adjust boundaries for the state’s nine congressional districts, 100 House districts and 50 Senate districts.
The detailed population data needed for the work are expected in late February, which means the process will start late and move fast.
Senators likely will draw maps for that chamber while representatives will craft them for the House. Both will work together on congressional boundaries.
Republicans in both chambers, along with Daniels, are pledging fair maps. But it’s hard to pin down what that means.
“I know a gerrymandered map when I see it. Those aren’t hard to spot,” the governor said. “I know what won’t work. My role is referee – just saying ‘don’t bring something to me that is obviously unacceptable.’ ”
Daniels and others say the current maps were drawn for political advantage. This means using voting patterns to draw safe or solid districts for one party or the other.
Long said in general terms he wants the districts to better follow geographic lines and communities of interest, and changes can’t dilute minority representation.
He also said he will consider incumbent addresses in the process – something that is sometimes criticized as a way of ensuring that incumbents don’t end up in the same district.
But Long said the U.S. Supreme Court has signed off on this factor as proper.
“Having the person you voted for remaining a representative is a proper consideration,” he said. “I can’t say every incumbent will be protected, but it’s not wrong to consider it. People should not automatically feel that’s wrong.”
Daniels said redistricting might be the toughest of the big three issues to get approved.
“People are only human,” he said, noting the inclination to make changes to their benefit.
Jobless insurance
Lawmakers will take a third swing at fixing the state’s deficit-ridden unemployment insurance system.
“It is not an unsolvable problem,” Daniels said, noting that businesses will likely have to pay more and some adjustments will have to be made to benefits.
Businesses pay taxes into an unemployment insurance trust fund based on their history of layoffs and the taxable wages of their employees. That fund then pays unemployment benefits when Hoosier employees are laid off. Indiana has had a structural imbalance in the fund – paying out more than it collected – since 2000. The imbalance was eating into the state’s trust fund surplus even before the recession hit and consumed all the funds. Indiana started borrowing money from the federal government to pay claims in late 2008 and currently owes about $2 billion.
Legislators in 2009 passed a whopping tax increase for businesses to start paying in 2010. But lawmakers in 2010 decided to delay the increase because they feared higher taxes would discourage job creation.
Businesses are now mandated to begin paying the tax increase in April.
But Republicans want to revisit the problem to find a way to pay about $60 million in interest owed to the federal government.
Rep. Dan Leonard, R-Huntington, is the chief negotiator on the topic for the House Republicans. He said talks have been ongoing, and legislators hope to phase in the tax increase more slowly. To pay for that change, benefits will be decreased for some workers, saving $150 million a year. Lawmakers also are expected to institute a special surcharge on businesses to pay the interest owed.
Leonard said the maximum weekly unemployment benefit of $390 probably won’t change and those currently eligible should remain so.
The only difference would be in how the benefit is calculated. Currently, a person’s benefit is based on the highest quarter of recent earnings, and Leonard and others want to move to an annualized calculation.
“We have a $2 billion hole to fill, and we are trying to do it as painlessly as possible,” he said.
Rep. David Niezgodski, D-South Bend, will be a key negotiator for the Democrats, who will focus on making sure unemployed workers are not hurt.
“I know times are extremely tough and we have to have respect for businesses, but the reality is this thing went on for so long with nothing done that it is hard for me to now lay it on the shoulders of the unemployed,” he said.