INDIANAPOLIS - With Indiana's unemployment rate lurching up to 8.2 percent last week, the dual imperatives for state lawmakers and the Daniels administration are to put jobless Hoosiers back to work quickly and ensure them adequate unemployment benefits.
Lawmakers are crafting the next state budget amid plummeting revenues, even as Gov. Mitch Daniels has proposed cutting state agencies by 8 percent, higher education by 4 percent and flat-lining funding for K-12 education to avoid raising taxes or dipping into reserves.
What could change the equation considerably, however, is Indiana's potential $5 billion piece of the $819 billion federal economic stimulus pie,that Indiana could receive, if Congress approves the proposed stimulus in a few weeks. Having passed the U.S. House, it's now before the U.S. Senate.
Such a mammoth $5 billion payout to Indiana would be on top of the $28.3 billion general-fund state budget Daniels is requesting from the Legislature. Between $1.5 billion and $2 billion could be used for roads and bridges, mass transit, school improvements and clean water projects.
But Daniels warned Thursday that the federal stimulus is a one-time payment that lawmakers should use for one-time projects - and not build into the budget for future years.
Doing so would be "building a cliff," that could result in massive program cuts when the stimulus runs out, the Republican governor cautioned.
Daniels instructed the Indiana Department of Transportation to compile a list of projects not funded by Major Moves that could be started quickly.
That could mean jobs for some unemployed Hoosiers, "but not everybody can jump on a road grader, obviously," Daniels said. "That's why we have to look, as part of the package, at things that might encourage investment, or at least keep taxes down across all kinds of businesses."
Meanwhile, Democrats in the Legislature still advocate a state-level stimulus to fund road projects.
A proposal by state Rep. Terri Austin, D-Anderson, would shift $1.5 billion in Major Moves funds from existing projects to 25 local road projects.
INDOT Commissioner Karl Browning has contended that would cause the Interstate 69 project to grind to a halt, and Daniels has dismissed it as "the worst bill of the session." House Bill 1656 is scheduled for a hearing today before the Democrat-controlled House Ways and Means Committee.
Senate Democrats plan to announce their own stimulus plan.
"I think there are a lot of places where we can spend money and put people to work - particularly on local roads, local bridges, local dams - where the investments will pay dividends in the future as well as the short term," said Senate Minority Leader Vi Simpson, D-Bloomington.
In other news:
Unemployment trust fund: About 260,000 Hoosiers were out of work in December. And the state's Unemployment Trust Fund has paid out more in benefits than it takes in through unemployment-insurance premiums.
None of the options are popular with legislators: raising employers' premiums, reducing benefits or some combination of the two. Key lawmakers are holding hearings on the issue, but a plan for fixing it has not been introduced yet.
Welfare modernization: Complaints that the state's new welfare modernization system loses documents, delays benefits and is hard for the elderly and disabled to navigate have led an Evansville lawmaker to try to stop its expansion.
State Rep. Suzanne Crouch, R-Evansville, authored House Bill 1691 that temporarily would halt the rollout of the Family and Social Services Administration's welfare modernization into the remaining 33 counties. It is scheduled to be heard today by the House Public Health Committee.
Smoking ban: House Bill 1213 would impose a statewide smoking ban on all public places, including gambling riverboats such as Casino Aztar. Antismoking advocates support the bill, introduced by Rep. Charlie Brown, D-Gary. Brown chairs the Public Health Committee that will hear the bill Wednesday.
Immigration The so-called "three-strikes" immigration bill would revoke the business license of any company caught employing undocumented aliens three times within seven years. Senate Bill 580 will be heard by the Senate Pensions and Labor Committee on Wednesday.
Property tax caps: A Senate committee gave its approval Tuesday to the governor's proposal to add last year's property caps into the state constitution. The amendment now goes to the full Senate.
The Associated Press contributed to this report.