A few years ago, some Hoosiers raised an eyebrow when Gov. Daniels successfully proposed the lease of the toll road in northern Indiana to boost the state coffers. Yet, it pales today to the bold (or desperate) actions some states are attempting and taking due to dire financial straits – the likes of which they have never seen.

Hands down, the “winner,” if you will, with the most outlandish gimmick to come up with quick cash is Arizona. The state is seriously considering SELLING its Capitol building and other state properties for $735 million and then leasing them back for $60 million a year.

It doesn’t take a genius to figure out the problems with this. Sure, it’s a major short-term windfall, but the state is only adding to its debt with the building lease. And what if Arizona can’t come up with its rent money? Will the governor and Legislature have to relocate to less fancy digs – say, a Phoenix strip mall?

The motive is sheer desperation. While California has the title of most beleaguered state budget in terms of actual dollars in debt, no state tops Arizona for percentage of budget shortfall (30% of a more than $10 billion budget). Arizona has also started borrowing from Bank of America to help pay the state’s bills and staggering $3 billion shortfall.

(Learning all this almost makes me want to hear Jim Nabors’ sing “Back Home Again in Indiana” and commit to eating a unique fried food at our state fair next year!)

While Arizona’s possible money “solution” comes from left field, there are plenty more commonplace practices – some legitimate, some a bit sketchy – that states take that can bite them and taxpayers in the end. 

California has tried myriad creative accounting maneuvers to try to make a dent in its nearly $60 billion black hole:  from borrowing from special accounts and local government property taxes to adding to payroll withholdings.  The state also pushed the last month of payroll (June) into the first month (July) of the next fiscal year.  This trick is akin to what used to be a regular occurrence in Indiana: the delaying of local government payments month after month (which ceased with the Daniels administration).

Meanwhile, Illinois legislators recently decided the state should simply not pay its $3.8 billion in bills until the next fiscal year.  Just like when a personal credit card is paid late, there is a price to pay.  For Illinois, that means its vendors may charge up to a 5% penalty.  Now, that’s a late fee that will hurt!

Bottom line: States’ budget quick fixes often come with consequences – steep ones.  Indiana, fortunately, is in better fiscal shape than nearly all others. I guess that’s another thing to be thankful for this Thanksgiving.

The Columbus Regional Hospital staff enjoys an impressive list of benefits. Health screenings with incentives for improvement, a telecommuting option for certain positions, short-term disability coverage and a bonus program are among the more traditional offerings. On the unique side: For individuals starting a family through adoption, the hospital helps pay the expensive adoption fee. 

One perk, however, has been a home run – sometimes literally! It’s an onsite concierge service that does everything from walking employee pets to arranging for shoe repairs to picking up groceries.

“The concierge service is definitely number one. The reason why is it’s a benefit that particular employees want,” explains director of human resources Joe Turco. 

“It may be you forgot to give your child lunch money, so the concierge can run money over to the local school. To me, it may be getting my dry cleaning accomplished. For someone else, it’s getting the oil changed in their car.”

Adds Chris Raaf, vice president of professional support services, “We have such great feedback on it. Someone sent a note recently that they had planned their son’s college trips through the concierge, who had put the entire itinerary together.  She said it would have taken her many hours on her off time to do that, so she really appreciated that.”

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.

Mercifully, we’re nearing the end (hopefully).

Members of the House are currently taking turns on the floor voicing their opinions on the budget bill, which is expected to be voted on (relatively) soon.

Regarding the contents of this budget, Rep. Craig Fry (D-Mishawaka) says he’s embarrassed by it.  Rep. Vernon Smith (D-Gary) stated that Democrats were getting only “a teaspoon while Republicans walk away with a truckload.”  Still, not all Republicans were pleased.  Representative Mike Murphy (R-Indianapolis) voiced his concern that the budget didn’t do enough to help homegrown Hoosier companies, many of which he feared would be forced out of business.

Leading up to and including today, much of the wrangling centered on K-12 education – be it funding (districts vs. students), charter schools, the scholarship tax credit program or virtual schools. 

Indeed, Rep. Smith spent most of his floor time on this subject and denounced the education policies contained in the budget.  Like the vast majority of Democrats, Smith had wanted the K-12 dollars to continue to be awarded on a school district basis, while Republicans were adamant the money follow the students.  The problem with Smith’s argument: Large urban districts like Indianapolis and Gary continue to see declining enrollment.  To Rep. Smith, however, Gary is being “treated like a stepchild.”

Smith and many other D’s also still haven’t warmed to the idea of charter schools and see them – as well as the tax credits to allow for school choice – as a threat to traditional public schools. 

Meanwhile, Rep. Bob Behning (R-Indianapolis) pointed out that both the Gary and Indianapolis Public School (IPS) districts receive more funding per student than any other district in the state.  In fact, IPS gets nearly $2,300 more per student than the state average.

Later on, fiscal stalwart Rep. Jeff Espich (R-Uniondale) implored legislators to do the right thing and vote "yes" on the budget.  “We’ve all had our say; we’ve all had to compromise.  I think we’ve done the best we can do.  Anyone can find a reason to vote ‘no,’ but you can also find a reason to vote ‘yes’ … one reason being not having to raise taxes.”

Stay tuned for more …

Indianapolis Mayor Greg Ballard made his plea today before members of the budget conference committee for over $45 million in funding to rescue the city’s Capital Improvement Board (CIB).

According to Ballard, the CIB has a “three to four-year hump to get over.  We’re at risk until that point.”

At risk are major sports events such as the Big Ten basketball tournaments, the men’s NCAA Final Four, the 2012 Super Bowl and the convention center expansion.

Representative Terry Goodin (D-Austin) asked the mayor if his “proposal would take care of the board’s deficit or is it just another Band-Aid” – with more dollars needed down the road.  Ballard replied, “I feel pretty comfortable with this going forward…I don’t want to come back (for more money) – nobody wants us to come back.”

Ballard pointed out several times the connection of CIB activities to the entire state, referencing that the majority (60%) of traffic to the downtown sports facilities, Circle Centre mall, etc. is from out of town.

Though overall sympathetic to the mayor’s predicament, some registered displeasure that one area of the state would receive such significant financial attention.

Representative Bill Crawford (D-Indianapolis): “One of the caveats I’ve stated all along is that I support this, but by my own calculations, I can count only 21 legislators representing Marion County – and that’s a problem.  Other areas of the state have problems too.”

Crawford also encouraged his fellow legislators to keep the Indianapolis Indians baseball team in mind when looking at the mayor’s proposed increase in the admission tax, which he said could adversely affect the most affordable sports option for families,

Representatives Dennis Avery (D-Evansville) and Eric Turner (R-Marion) raised questions over Ballard’s proposed $2 million increase in the Professional Sports Development Area (PSDA) from $8 million to $10 million.  These additional funds would come to the CIB via the retention of more funds – as opposed to going into the state coffers.  These two legislators were concerned with how this would look to other cities like Fort Wayne and Evansville with professional sports teams but already receiving significantly less funding. 

Meanwhile, Rep. Jeff Espich (R-Uniondale) worried that helping the CIB “would open it up for others to try to fix gaming and other issues elsewhere ….we will be doomed if that happens.”

One voice of reason in all of this was Sen. Lindel Hume (D-Princeton), who seemed to be tired of hearing that no one outside of Marion County truly cared about the CIB funding woes. 

“I live in rural Princeton and I care.  The CIB represents a significant investment in future revenue for Indiana,” he notes.  “If we don’t do something, Circle Centre (mall) will close; we will lose dollars.  If we don’t do something, the conventions will leave; we will lose dollars.  This is as important as a large manufacturer to the state.”

But perhaps Rep. Cherrish Pryor (D-Indianapolis) made the best case for providing the CIB with the requested money.  “The state receives a much greater amount in return – roughly half a billion dollars – than what CIB is asking us for.”

It would appear then that some common ground must be reached and CIB funding included in the state budget, despite the shortness of time. (Crawford noted a bill must be printed by Sunday to present to the House.)

Money money money money MONEY. Some people got to have it.
 
For Democrats working on the state budget, that last lyric has been amended to: Some districts got to have it.   
 
The D’s are pushing hard to protect K-12 school funding for districts rather than students. In other words, enrollment numbers be damned; urban districts, which have historically received higher funding levels than others, should stay that way regardless!
 
Thanks to items called the “minimum guarantee” and the “deghoster,” declining districts like Indianapolis Public Schools (IPS) have continued year after year to receive annual funding increases – even as enrollment levels have declined dramatically. Today, most of these urban districts get far more funding per student than rural or suburban schools. 
 
The Indiana Chamber’s education expert, Derek Redelman, notes that the state currently provides IPS with over $8,500 per student – far more than the $6,500 state average. When federal funds are included, the total for IPS rises to more than $9,400 per student, while the state average is just over $6,700. The numbers are even higher – over $15,000 for IPS – when local property taxes are included.
 
Yet, IPS Superintendent Eugene White today (one of a seemingly endless stream of testifiers, most of whom can now venture to the Statehouse committee rooms in their sleep) came before the budget conference committee with his hands out for more. Despite fewer and fewer students and additional increases in per pupil funding, White contends the money IPS gets from the state is still not enough. 
 
White had no answer for Rep. Brandt Hershman (R-Monticello) when asked what districts should be cut to give IPS more money or whether he would support a tax increase to give his district more money. 

According to Redelman, “This is the epicenter of our current budget debate. Democrats firmly back districts while Republicans want to fund students.”
 
Just how wide is the gap?
 
After it was noted that IPS funding would take a cut under the Senate budget bill (though it would get one of the largest increases per pupil) while the growing Hamilton Southeastern district would see an increase (but a cut on a per pupil basis), Rep. Bill Crawford (D-Indianapolis) imparted this bit of logic:

“We (the Democrats) are looking for a way to make K-12 education (funding) more equitable. If we have to bring the top (funded schools in the Senate plan) down to bring the bottom up, I’m for it.”

The budget bill will be in conference committee the next few days – perhaps even through Sunday. Lawmakers will officially return at 9:30 this morning, although most negotiations and compromises take place well out of the public view.

A few basic things to keep in mind about a conference committee:

The makeup is two members (“conferees”) each from the House and Senate as well as “advisors” – all appointed by House Speaker Pat Bauer and Senate Pro Tem David Long. These conferees and advisors may be removed at any time by the respective House and Senate leaders (generally only done if the appointee is threatening to go against the party line).

The conference committee process is less structured than the regular committee process. Conference committees may meet within one (Senate rule) or two (House rule) hours after notice of the meeting is posted (on the bulletin boards outside the respective Senate and House chambers) and are open to the public “whenever feasible.” No further posting is required if additional meetings are necessary, and it is within the chair’s discretion to be forthcoming about time and place of any additional meetings.

A bill may pass out of a conference committee only with unanimous consent of the conferees. This is called the conference report. If it passes out of the conference committee, both chambers vote on the final version.