Legislators clash on tax caps, state spending

BY PATRICK GUINANE, Times of Northwest Indiana
pguinane@nwitimes.com

INDIANAPOLIS | The Indiana General Assembly kicked off the four-month legislative session Wednesday with partisan posturing over state spending and the fate of property tax caps approved a year ago.

Before either chamber had even gaveled in, Republicans accused Democratic House Speaker Pat Bauer of holding hostage a measure that would set up a 2010 referendum allowing voters to decide whether to cement the tax caps into the Indiana Constitution.

"We're calling for the speaker to free the permanent property tax caps," House Minority Leader Brian Bosma, R-Indianapolis, told reporters Wednesday morning. "The General Assembly made a promise to every Hoosier homeowner, every renter and every business person to cut taxes now and cap them forever. We did part one, and the speaker and the Democrat caucus in the House are now reneging on part two."

Democrats prefer to wait until at least next year to gauge whether local government across the state can withstand more than $500 million in spending cuts triggered by the caps, which promise to eventually limit tax bills to 1 percent of assessed value for homeowners, 2 percent for landlords and 3 percent for businesses. Either way, the proposed constitutional amendment would not go on the ballot before 2010.

Bauer made his own waves by insisting that lawmakers tap some of the state's $1.3 billion in rainy day funds to make budget decisions less painful and put Hoosiers to work building roads, bridges and other state-financed projects.

"We can't just bury ourselves and say, 'We're helpless. Please, Mr. Obama, bail us out,'" Bauer, D-South Bend, told the chamber. "It's not only raining today in Indiana, it's a downpour. We don't need to keep that money in the bank. We could use it."

Republican Gov. Mitch Daniels has repeatedly declared the state reserves off limits, saying the money could be needed later if the recession outlasts the next two-year state budget. And Senate President David Long, R-Fort Wayne, immediately threw cold water on the proposed rainy day fund raid.

"We need to be extremely cautious in going down the road of spending any of these rainy day funds because you may think it's raining now, but we may (later) be in a tsunami," Long said.