By Erik Potter, Post-Tribune staff writer
INDIANAPOLIS -- A brief meeting of the State Budget Committee ended Tuesday with a seeming agreement among the House, Senate and governor's office on a plan to get accurate tax revenue estimates for the state.
Members of the State Budget Committee, a hybrid committee made up of representatives of the legislative and executive branches, tasked its Revenue Forecast Technical Committee to prepare a new state revenue forecast in two weeks to aid legislators and Gov. Mitch Daniels in preparing the state's next two-year budget, now two weeks past due.
The committee also appointed two additional analysts to assist its technical group, John Grew, director for state relations and economic development initiatives for Indiana University, and Bill Sheldrake of Policy Analytics, which also works as a consultant for the Regional Development Authority.
The new forecast will take the place of one prepared less than a month ago, which Gov. Daniels and House Republicans criticized as painting an overly rosy scenario, and which ultimately scuttled the end-of-session budget effort in April.
The credibility of the revenue forecast still proved a thorny issue, as Daniels' State Budget Director Chris Ruhl and Sen. Luke Kenley, R-Noblesville, traded snipes over whether the budget committee could produce an accurate revenue forecast and whether the governor would go along with the forecast created.
"Are you telling me that the new committee is incapable of (preparing a good forecast)?" Kenley asked Ruhl after he had criticized the previous effort.
"Usually, (the revenue forecast) is an agreed thing. This year, obviously, we've had a rift," said Sen. Karen Tallian, D-Ogden Dunes, a member of the State Budget Committee.
Revenue forecasts have overshot state income since December. The most recently revised estimate, released in mid-April, misjudged April's tax revenue by $255 million.
To correct this, Ruhl pressed for a revised methodology in preparing the next revenue report. He told the committee that state income and sales tax revenue has averaged a 3.8 percent and 3.6 percent growth rate, respectively, over the past decade, but in Fiscal Year 2009, they've actually shrunk by 12 percent and 4 percent.
Rep. William Crawford, D-Indianapolis, and Kenley were insistent that the current process for creating revenue forecasts -- one in which the legislative branch is represented -- remain the same.
To shepherd the overall budget-making process, the leaders of the House and Senate -- House Speaker Pat Bauer, D-South Bend, and Senate President Pro-Tempore David Long, R-Fort Wayne -- agreed to create a special 12-member budget sub-committee with representatives from the Democratic and Republican caucuses in the House and Senate. The group will review the new revenue forecast and craft a new budget plan with Daniels' budget proposal, which they have requested to have presented to them on June 1.
The goal would be to be ready for a special session to pass a budget in mid-June.
Kenley said he expects the final budget to be less than the nearly $30 billion budget defeated in the waning hours of the legislative session. Where the cuts in the previous budget proposal will come from remains to be seen.
In order to avoid a government shutdown, the state must pass a budget by the end of its fiscal year, which is June 30.