Lesley Stedman Weidenbener, writing for the Louisville Journal Courier, has a lengthy article on the upcoming session. For the House Democrats, the state budget appears to be the primary focus. Revenues are expected to be essentially flat, following two years of declining revenues according to the article. The General Assembly will be forced to deal with an insolvent unemployment system that has recently been limping along only on the strength of federal loans.
Meanwhile, Republicans want to tackle local government restructuring and limiting the state’s future tax flexibility by enshrining property tax caps in the Constitution.
The already grim budget projections are based on the assumption that the economy doesn’t tank much further and that something catastrophic, like the collapse of one or more of the Big 3 auto makers doesn’t occur. Gov. Daniels does not want the General Assembly to consider tapping into the “rainy day” funds. (A while back, Rep. Bauer quipped something to the effect of “guess what, it’s raining.”)
Republicans want to push for second passage of a proposed Constitutional amendment that would cap property taxes at 1% for residential property; 2% for rentals; and 3% for all other property. Because this would affect local government budgets more than state government budgets, it is local government officials urging state officials to slow down. Rep. Bauer appears to be siding with local government officials in this. Second passage of the Constitutional amendment does not have to take place until 2010. As a matter of law, the caps are already in place, just not in the Constitution. The Republicans appear ready to plow ahead with the Constitutional provision, presumably before any problems with the tax caps fully materialize and public opinion shifts.
Finally:
Daniels has proposed a nearly complete overhaul of county government, asking lawmakers to consolidate the board of commissioners and several elected county offices into a single, elected executive position, similar to a city mayor. The governor also wants to eliminate township government and force small school districts to consolidate.
But while Republicans in the Senate appear to have embraced the proposed changes, House Democrats are wary and many local officials are irate.
Following the jump, I’m just going to repost my summary of the Kernan Shepard report (pdf) upon which the Daniels’ restructuring proposals are based.