End of Session Negotiations Successful

Legislators finally reached a deal that primarily involved the Unemployment Insurance Fund and schools. The deal means about $500 million for businesses and give schools some flexibility to deal with about $300 million in cut state funding.

On the business end of things, legislation will delay implementation of a 2009 deal raising unemployment insurance obligations of businesses. This will require the state to borrow about $360 million more to fund unemployment insurance than it otherwise would have and to pay an additional $150 in interest.

On the education side of things, schools had to deal with a $300 million cut in state funding that arose, at least in part, from the decision a couple of years ago to fund schools with sales and income taxes at the state level instead of from property taxes at the local level. This legislation would allow schools to mitigate the loss of money by using funds normally dedicated to transportation and building projects to fund operating expenses. Obviously, this isn’t a long term solution. But, I guess the hope is that the state funding shortfall isn’t a long term problem either.

Specifically action took place yesterday on the following bills:

SB 23 – Unemployment insurance and economic development. Passed the Senate 50 – 0, House 85 – 12. This was the unemployment insurance bill. It also has a number of provisions related to the Indiana Economic Development Corporation, including creation of a small business ombudsman and monitoring to determine whether businesses are complying with requirements of incentive packages they receive. It provides for emergency TANF funding and allows the Department of Workforce Development to implement a subsidized employment program. Requires the Department of Labor to develop guidelines and procedures for investigating questions and complaints concerning employee classification and make recommendations concerning necessary legislation. It makes some changes to the unemployment benefits process. For example, an ALJ making determinations on unemployment benefits has to be a licensed attorney. If an employer gets an initial determination in favor of an employee reversed but the reversal is based on information the employer didn’t provide initially, the employer’s UI account can still be charged a percentage of the benefits paid out.

HB 1367 – Education. Passed the Senate 50-0, House 97-0. It makes changes concerning school participation in the state employee health plan. Requires additional information concerning ISTEP performance and student retention be included on a school corporation’s annual performance report. Requires schools to prioritize allocation of resources going to remediating kids with trouble reading in grades K-3. If remediation efforts have a fiscal impact, school superintendents have to come to the General Assembly for an appropriation; if not, they can implement them following a public hearing. Beginning in 2012-2013, school years have to start after Labor Day and end before June 10. Grants an exception for schools that are year round or that coordinate schedules with a college. Allows transfer of up to 10% of capital projects funds to operating funds if teachers aren’t getting raises in 2010-2011.

HB 1086 – State and local administration. Passed the Senate 50-0, House 89-7. This is a grab bag of stuff. Youth advisory council; boxing regulations; property tax assessment procedures; library administration; golf course and aircraft taxes; veteran’s home eligibility; and ballot language for proposed property tax Constitutional Amendment.

HB 1336 – Mortgages and public deposits. Passed the Senate 50-0; House 95-0. Allows for voluntary participation in a five star mortgage program which, it looks like, would involve people with good equity in their homes, a fixed interest rate, and a 30 year term. Basically, it looks like it creates a level of trust that it’s a basic mortgage, with more or less creditworthy borrowers, from a more or less trustworthy lender. Allows PERF and TERF to engage in some joint management of their funds. Allows local government to make certain investments. And it changes some other financial regulations I don’t have time, inclination, or probably knowledge to comment on.

SB 396 – Assessment of agricultural land. Passed the Senate 50-0; House 97-1. For the assessment of agricultural land, it requires the DLGF that uses a 6 year average with the highest year thrown out. (If you’re using this approach, shouldn’t you also throw out the lowest year too to avoid artificially lowering the assessed value of agricultural land to the detriment of other property tax payers?)