Great, we have a state budget for the next two years, but what’s to make of it?

Foremost, the budget sticks to Gov. Daniels’ request to maintain a $1 billion surplus in the state’s reserve funds.   According to Indiana Chamber tax lobbyist Bill Waltz, this prudent amount is significant and important for the state to stay on track financially.

“With the revenue stream being so incredibly uncertain in the coming months and the federal stimulus dollars that are built into the two-year budget going away in 2012, it is critical that we not just cross our fingers and simply hope for the revenue stream to return.  Because if the economy fails to rebound or falters only slightly longer than the revenue projections, we will be in a hole at the end of the budget cycle.

“And then the only way to avoid a tax increase of some kind would be to utilize the surplus balance as that final bridge out of the troubled economy. In other words, it is at that time – not now or next year – that we (the state of Indiana) may want to use those funds,” he explains.

Waltz also believes the budget strikes a good balance between “spending desires and reasonable fiscal constraint on many issues (not just in the education area).”

A number of positive provisions that fell by the wayside via the regular session budget collapse had better fortune this time around.  Among them, the bulk of what was House Bill 1447, an all-inclusive piece of tax legislation, and a multi-million-dollar financial rescue for Indianapolis’ Capital Improvement Board (CIB).

The CIB situation simply had to be dealt with, Waltz says.

“Many from outside the Central Indiana area are reluctant to acknowledge the economic contribution that the CIB facilities (the convention center, Lucas Oil Stadium, Conseco Fieldhouse and Victory Field) make to the state’s economic vitality and coffers. Indiana, not Indianapolis, could not afford to see these operations and the tax revenue that their attractions bring be put in jeopardy,” he asserts.

Indiana Chamber education lobbyist Derek Redelman believes the budget bill also produced one of the best sets of education reform in the state’s history.

Heading that list of accomplishments is the new K-12 school funding formula that gives greater focus to students, rather than school districts, than any previous budget of the last couple decades. 

“The bill also included a scholarship tax credit that will generate private donations to help low- and moderate-income families to attend the schools of their choice – while also saving money for the state.  It also eliminated a longstanding statute that had prohibited schools from using the results of state tests to evaluate teachers,” Redelman notes.

“This budget avoided caps and other controls on charter schools, despite a session-long full-court press by Indianapolis Public Schools, House Democrats, teacher unions, school administrators and other charter school opponents.  Plus, it will allow virtual charter schools to finally get started, after a two-year moratorium created by the 2007 state budget.” 

Correction: The budget passed the Republican-controlled Senate 34-16.  A total of 30 of the 33 Republicans voted for the bill and were joined by four Democrats (Hume, Young, Arnold and Mrvan). Republican no votes were from Leising, Delph and Becker.

Late last week, the U.S. House voted 219-212 to pass climate change legislation. It is one of what will be a long series of contentious debates and votes during the current session. Although Democrats have a strong majority in the House, this was not a party-line vote. A few of the facts:

• Forty-four Democrats voted against the measure, with 211 voting for it. Thus, it took some of the eight Republican "yes" votes for the bill to pass
• Those numbers may be slightly misleading, however, as some of the Dems switched their votes when the total reached 220. House Speaker Nancy Pelosi says some of those 44 would have been with her party’s majority to ensure the bill’s passage
• This topic has often been referred to as geographical rather than political. According to analysis from the National Journal, 30 of the 121 Democrats from states that generate at least 40% of their power from coal (think Indiana and its 95% coal use) voted against the bill. Only 14 of the 134 Democrats from states that are less reliant on coal joined in the opposition
• On the political side, Sen. John McCain carried 49 districts last year in which Democrats were elected to the House. Twenty-nine of those reps voted against the measure. In the 207 districts that voted for both Democratic reps and President Obama, only 15 voted against the bill

Political dynamics will continue to be at play — they always are. But each issue, each vote, will prove interesting with different legislators and regions coming to the forefront. Stay tuned for plenty more to come.