By Eric Bradner, Evansville Courier & Press
INDIANAPOLIS - A special session is certain after state lawmakers failed to pass a budget ahead of Wednesday's midnight deadline.
Minutes before midnight, the Republican-led Senate passed the budget on a 37-13 vote as the Democratic-controlled House defeated it, 27-71.
Now Gov. Mitch Daniels will have to call lawmakers back for overtime. And if they don't agree on a budget by the July 1 start of the new fiscal year, most of the state government would shut down.
Each day of a special session would cost taxpayers a minimum of $12,420 in legislative per diem.
"I think it only gets worse," said Senate Appropriations Chairman Luke Kenley, R-Noblesville. "It's hard to see how it will get better but maybe it will work."
For two days House Democrats and Senate Republicans were at an impasse. Senate Republicans wanted to cut out $100 million in education spending, but House Democrats said no.
House Speaker B. Patrick Bauer, D-South Bend, decided to call the Senate Republican budget to a vote, even though he said many Democrats would oppose it and for it to pass, some House Republicans had to support it.
None did. All 27 "yes" votes on the came from Democrats, who narrowly control the chamber, 52-48.
Bauer adjourned the session and lawmakers grumbled about having to come back as they headed toward exists.
Daniels said he preferred a special session to the Senate Republican spending plan, which he said still spends too much and would leave the state with a shortfall.
"It is far better that the Legislature try again than to have an irresponsible budget that I would have been compelled to veto," the governor said in a statement. "It is critical that Indiana avoid the fiscal disaster and massive tax increases that would result from dramatically increasing spending while revenues are falling."
Bauer released a statement after the House adjourned blaming Republicans in the Legislature for not getting a budget done.
"This budget was crafted by the Senate Republicans and endorsed at one time by the Republican governor of Indiana," he said. "However, this Republican budget could not get a single vote from Indiana House Republicans."
"As best as I can tell, there was no effort from the governor to convince them otherwise."
The top Democratic budget negotiator, House Ways and Means Chairman Bill Crawford of Indianapolis, said he thought the two sides had a deal Tuesday morning.
They would have used federal stimulus money to boost education spending by 4 percent over the biennium. That budget, Democrats said, also protected Indiana's $1.3 billion surplus.
But after meeting with Daniels, Kenley said they had to trim out another $100 million in education spending - or cut the increase to 3 percent - in order to boost the surplus to $1.4 billion, or Daniels would veto the budget.
When Senate Republicans wouldn't budget, Bauer's only choice to avoid driving the state into a special session by default was to call their budget to a vote.
House Republicans staunchly opposed the budget during a floor debate that started after 11 p.m.
"This is a recipe for a big tax increase," said Minority Leader Brian Bosma, R-Indianapolis.
"You all weren't the only ones that worked hard on this budget," said the top fiscal House Republican, Jeff Espich of Uniondale. "We worked hard on it too. It just didn't bear a lot of fruit."
A leading Democratic budget negotiator, Rep. Scott Pelath of Michigan City, said Democrats had compromised as much as they could.
Pelath, who voted for the budget, blamed House Republicans for its failure.
"I'm sorry, but I wasn't born yesterday," he said. "You guys were never going to vote for the budget, from day one."
The governor's officials did not say when Daniels will call lawmakers back for the special session.
Bauer said Democrats already gave Republicans much of what they wanted, including agreeing to a two-year budget rather than the one-year spending plan Democrats preferred.
It's not clear what else House Democrats will be asked to give - or what further cuts they would consider.
Standing outside the Senate at 1 a.m., Long, R-Fort Wayne, said he hoped Daniels would wait until next week to call the special session.
"This won't be easy," Long said of agreeing on a budget. "This is not something that's going to happen magically overnight."
The last special session came in the summer of 2002, when lawmakers raised taxes to overcome a budget deficit.