The General Assembly is starting to resemble that guest who just won’t leave the party. But I’m not sure it’s their fault. From time to time, people grouse about how if they ran their business in this fashion, they’d get fired or whatever. Legislating isn’t a business — unless it’s the sausage making business. The primary distinction is that corporations are not democracies or even republics. They tend to be autocracies – a form of government that can be wonderfully efficient, but which we avoid for other reasons. So, efficiency isn’t the hallmark of good government.

The Republicans and the Democrats are in the midst of a good old-fashioned negotiation. Each has priorities and is looking for leverage to get as much out of the negotiation as possible. Each side typically sees the ticking clock as an asset — or at least distrusts the notion that the other side is putting its best foot forward with a lot of time left on the clock, so serious negotiations are tough unless a deadline is looming. Now the deadline is approaching. Old appropriations expire on June 30 and the legality of continued funding will probably become ambiguous at best for a lot of government functions. I tend to think they’ll reach a deal. If it were just the House Democrats and Senate Republicans negotiating, I’d be more confident of a budget being past. In fact, I’m pretty sure they would have passed a budget in the regular session. Governor Daniels is the fly in the ointment. At the end of the regular session, he shifted his negotiation stance at the 11th hour and effectively pulled the rug out from under the House and Senate. Perhaps not so incidentally, it is Gov. Daniels whose tastes seem to run most toward the autocratic.

The biggest sticking point seems to be that the Democrats want to fund the city schools at a level that’s reasonably close to the present level. Gov. Daniels wants to drastically cut spending, particularly in school districts around Indianapolis and Gary. He favors a spending formula that rewards well-heeled, growing suburban schools. I think the debate over a one year budget versus a two year budget is just so much sound and fury. It’s gimmicky, and I doubt the House Democrats are actually all that married to the idea.

Rumor has it that the legislators are negotiating through the weekend. Then they have Monday and Tuesday to pass a budget. I expect they’ll put it on Gov. Daniel’s desk at the last minute so that the decision about whether to shut down the government falls squarely on his shoulders with all the praise or blame that goes with it. And, if they do that, I expect he’ll blink and sign whatever they give him.

But, you know, I’m just a guy with a computer and an opinion. My computer isn’t worth a heck of lot at this point, and I wouldn’t put a lot of money down on my opinions either.

Eric Bradner of the Evansville Courier Press has good coverage of the special session as the budget works its way through Senate. The budget bill underwent second reading in the Senate yesterday. The bill is expected to be adopted today, the House will dissent to the changes, and it will be ready for conference committee. According to Mr. Bradner, the Senate proposal is closer to the proposal previously put forward by the Governor but it has concessions to the House Democrats, particularly with respect to education spending.

I particularly liked the history lesson tucked away in the article about Governor Oliver Morton (“He brought us salt” as my old boss used to say):

The only time Indiana hasn’t had a budget was in the 1860s during the Civil War era. Republican Gov. Oliver Morton, a staunch ally of President Abraham Lincoln, regarded Democrats as confederate sympathizers and feared the party would try to overthrow him and join with Confederate secession efforts.

When the Democratic-led General Assembly responded to several unconstitutional moves by attempting to weaken Morton’s control, the governor had his party’s legislators flee the Capitol to prevent the General Assembly from attaining a quorum and being able to conduct business.

Morton raised private funds to finance state government and the war effort for two years, without the General Assembly’s approval.

The inclusion of this tidbit in the article about the budget reminds me of a comment my assistant made of me. “Around Doug, you never know when a history lesson is going to break out.”

Senator Long has introduced SB 1 which would basically continue appropriations at the level of the prior year if a budget wasn’t enacted for the current year. Seems to me like this would reduce the pressure for legislators to get their business taken care of and go home for the year.

The introduced bill seems to give the budget director a lot of power in determining the actual appropriations where there is some ambiguity as to the actual funding level.

The state budget moves out of the House and goes to the Senate where it will presumably be gutted and something completely different will be put in its place. Then the House and Senate will have to come up with a compromise in conference committee.

The Journal Gazette’s Niki Kelly (and a variety of other news sources) reports from the State House on the special session. There appear to be three bills so far – the budget, the Indianapolis Capital Improvement Board bill, and a bill to review the Family and Social Services Administration’s modernization efforts.

The main point of contention so far has to do with the C.I.B. bailout. It is likely to become a vehicle for gambling legislation to benefit Lake County, the horse tracks, French Lick, and, possibly, Fort Wayne.

Rep. Charlie Brown, D-Gary, said he will offer an amendment to the capital improvement bill that would allow one of Gary’s two riverboat casinos to move to a more profitable, possibly on-land location in Lake County.

Other likely gambling provisions include help for the state’s two struggling horse track casinos and a change in the admission tax for the casino in French Lick.

And Fort Wayne officials are still trying to gain approval for a referendum on whether gambling should be allowed in the city.

If the C.I.B. is on the table, I don’t see why gambling shouldn’t be on the table. But, personally, I think both should be left alone in the special session.

The FSSA audit is also probably something that will be a distraction from the budget, but it’s an interesting bill. It requires an independent audit of the FSSA’s contract with IBM to perform eligibility determinations for public assistance. Among other things, it would require the auditor to assess document handling concerns, including the presence of unattached documents in the process, the number of documents received by mail, the number of documents received by fax, the number of incorrectly classified or indexed documents, and the number of complaints about documentation. It would also look into call wait times and other sorts of delay. These are good things to look into. I suspect that these bureaucratic inefficiencies are regarded more as features than bugs: if you can get a person to forgo benefits through bureaucratic snafus, you’re saving money. Why would you spend more money to make the process more efficient and thereby cost yourself more money in benefits? Lose-lose, right?

The House Democrats have itemized the impact of the Governor’s proposed budget on individual school corporations. (h/t Blue Indiana). The full spreadsheet, school district-by-school district, is available here (pdf).

The gorillas in the room are Indianapolis Public Schools and Gary Community School Corporation who stand to have their funding cut by $43.5 million (-14.88%) and $25 million (-22.41%) respectively for 2010-2011. The third school corporation in terms of cuts, Anderson Community School Corp. is at about $5 million (-7.5%). Also of interest to me is my alma mater, the Richmond Community Schools, which look to have their funding cut by $1.8 million (-4.84%).

My local schools, Tippecanoe School Corp. Lafayette Community Schools, and West Lafayette come out much better, relatively speaking with increases over the two year period of $5 million (+7.3%), $577,000 (+1.2%); and $300,000 (+2.41%) respectively.

Niki Kelly has a good article on the Democratic walk-out from the committee hearing yesterday. They did so to protest what they saw as staged public testimony and what they see as misleading representations by Gov. Daniels on education funding.

The only thing I would have added to Ms. Kelly’s reporting is perhaps the text of the solicitation for testimony sent by the Indiana Republicans. Jim Shella had this on his blog:

The Indiana Republican Party sent out an e-mail today looking for taxpayers to testify in favor of Governor Mitch Daniels’ budget at a legislative committee meeting tomorrow. (The committee is mid-identified in the e-mail as the Legislative Council.)

The e-mail includes these instructions: “Testimony need only be 2-3 minutes and should include details about your story (i.e. a concerned taxpayer, small business owner, 18-year-old who would inherit the debt, retiree, young family just out of school, etc). ””

Based on his comment, to Ms. Kelly, Senator Luke Kenley seems to be keeping a cool head and not burning bridges. He said of the Democratic walk-out:

“I’m concerned. This is a blow to our cooperation,” said Sen. Luke Kenley, R-Noblesville. “The Democrats feel like they are being backed into a corner. There are fewer revenue dollars, which means fewer solutions. And they don’t like the solutions.”

Meanwhile, the concern about Gov. Daniels representations about education funding has to do with the fact that state funding for education will increase by only about 0.25%. (I presume that none of this is adjusted for inflation, meaning that in terms of real dollars, we’ll be spending less on education.) When Gov. Daniels claims a 2% increase, he’s counting federal stimulus dollars.

Fort Wayne Community Schools Superintendent Wendy Robinson told the committee it misleads the public to include the federal stimulus money in the state-funding calculation.

“We know we’re going to have to take a hit, so let’s be clear about what that hit is,” she said.

For instance, under Daniels’ proposal, the base state funding for FWCS in 2009 is $196 million and would drop to $195 million in 2010 – a 0.5 percent cut. A similar cut would come in 2011.

In comparison, under previous budget proposals this year, FWCS would have seen a modest increase due to several factors in the school-funding formula that Daniels’ plan removed.

Also, it turns out, federal dollars can’t be spent in the same way as state money. For example, it is not appropriate to spend such money on ongoing expenses like electric bills or staff salaries.

And, speaking of Mitch Daniels, be sure to check out Doghouse Riley’s thoughts on the recent talk of him considering a Presidential run in 2012.

The 2009 Special Session of the Indiana General Assembly will commence June 11.

Daniels told members of the bipartisan State Budget Committee on Tuesday that the special legislative session would begin Monday. Daniels said he hopes that give lawmakers plenty of time to agree on a spending plan before the current budget expires on June 30.

Update Some confusion with the AP story. It won’t start on Monday, but on the 11th of June — Thursday. (Per WTHR and Jim Shella.)

Special sessions are rough on a legislator. Without one, you can simply tell a constituent or a lobbyist to forget about their pet project for a little while. However, with a special session, the pressure gets turned back on, with many constituents and lobbyists pressuring legislators to put this or that thing into the budget bill or get just one more bill introduced for consideration.

Lesley Stedman Weidenbener has an article about disagreement between the chambers as to what should be considered during the special session. David Long, President Pro Tem of the Senate, says that gambling won’t be considered as a way to deal with budget problems.

House Speaker Pat Bauer, on the other hand, says that if a fix for Marion County’s Capital Improvement Board is included, then the special session is properly considered not as simply a budget session, but as an effort to deal with economic crises – and, he points out, there are economic crises in places other than Indianapolis.

Gov. Daniels is opposed to gambling legislation. He says that this special session is about the budget and “special interests will have to wait.”

I don’t have any strong interest for, or against gambling — though I think it odd that a population gnashing its teeth about burdensome taxes has sufficient money to piss away on gambling — but, politically, I think that Bauer has the upper hand on this one: if Marion County’s Capital Improvement Board gets injected into the special session, then the flood gates come open. Telling Indianapolis “yes” while telling everyone else “no” is going to be unpalatable out here in the sticks.

Lesley Stedman Weidenbener has an article advancing the opinion (at least via the headline) that a state revenue forecast means the General Assembly has to cut $1.1 billion in spending. This is true if 1) the forecast is accurate; and 2) the General Assembly decides not to use money the state has saved.

The revenue forecast suggests that Indiana has hit a skid. Revenue from sales, individual, and corporate taxes is all lower. The estimates suggest Indiana will have $27 million less in revenue to work with over 2010 and 2011. Democrats generally propose steering into the skid. Bill Crawford suggests aggressive job creation spending. Scott Pelath warns against taking a “meat ax” to education spending. Gov. Daniels wants to stand on the brake, saving the $1.3 billion in state reserves for when the economy isn’t doing so well.

With respect to the forecast, Pelath also throws out a variant of “figures don’t lie, but liars figure.”

And the committee’s vice chairman, Scott Pelath, D-Michigan City, criticized the forecast, an update of estimates released last month that most Republicans had complained were too rosy.

“This was a great forecast for all the people who wanted to take a meat ax to education and job-creation efforts,” Pelath said. “Certainly if you do the forecast enough times, you end up getting the answer you want.”