INDIANAPOLIS -- Questions dominated a Senate hearing Wednesday over a bill addressing financially distressed Hoosier cities and towns, with few answers readily available to resolve them.
By the end, most people agreed a law should be in place to deal with insolvent local governments. Sen. Ed Charbonneau, R-Valparaiso, said his Senate Bill 105 is a "work in progress" that will probably be revised before it gets a vote.
"Hopefully we have a commitment to pass something," Charbonneau said.
As written, the bill would let a local government or qualifying creditor petition a three-member Indiana Distressed Unit Appeals Board. That board would appoint an emergency manager to take on the powers of the executive and fiscal branch of that government and try to put a plan in place to resolve its financial problems.
The DUAB could also send the unit of government into bankruptcy court, an option most agree is not available under current law.
But Charbonneau couldn't tell the Senate's judiciary committee how that manager would be paid, and speakers complained about the lack of qualifications laid out for such a person. A lobbyist for Indiana cities and towns pointed out no appeal process exists for a city sent to the DUAB by one of its creditors, and a school lobbyist asked whether a separate board should be created to deal exclusively with education.
The DUAB helps ailing local governments raise revenue by raising local property tax caps. It is considering a petition by Gary, and it usually doesn't rule until after the General Assembly adjourns for the year.
Tony Walker, a Gary lawyer who has said he plans to run for a seat on the City Council, asked whether the law would apply to Gary's pending petition.
"That's something that we need to take a look at," Charbonneau said.
Gary resident Jim Nowacki told the committee the bill is needed especially in his city, which petitioned the DUAB in 2009 and 2010 before returning this month.
"Our city has already defined itself as a distressed unit," Nowacki said. "Not once, not twice, but three times."
Karen Freeman-Wilson, who is running for Gary mayor, said Charbonneau's bill is aimed squarely at her hometown.
"This is a takeover by state government, which is very, very troubling," Freeman-Wilson said.
Charbonneau denies the bill is aimed at Gary. He began his remarks by saying it's "very unfortunate" the legislation has even been labeled a "bankruptcy bill," instead of one meant to help cities avoid that fate.
"I see it as a process that is to help the taxpayers in the city of Gary," Charbonneau said.
He later acknowledged the idea for the bill came to him while he monitored the DUAB's activities. Gary is the only city that has petitioned the board
The committee took no vote on the bill, and the chairman said a revised version will get another hearing.