O'Bannon announces more cuts

INDIANAPOLIS -- Gov. Frank O'Bannon said Wednesday he will cut $332 million in spending for such things as computers for schools, building repairs, research and development programs and local projects legislators designated for their districts.\nO'Bannon said the cuts, which are on top of $782 million in cuts he already announced, are needed to help shore up a projected $1.3 billion budget deficit that lawmakers failed to fix during the legislative session that ended last week.\nThe bulk of the money would come from gambling revenue in the Build Indiana Fund that is used for state and local projects.\n"I have no choice but to do whatever it takes to address the immediate needs of the budget," O'Bannon said at a Statehouse news conference.\nThe cuts include $64 million for such things as firetrucks, sidewalks, parks and community programs that lawmakers had penciled in for their districts. That drew some grumblings from legislators.\n"Those local projects are important…and I respectfully would resist the wholesale elimination of them at this time," said House Ways and Means Chairman B. Patrick Bauer, D-South Bend. "I know he's got to do some of that, but I just hate to see it all go in one fell swoop."\nThe Democratic governor will need help from at least one Republican -- state Treasurer Tim Berry or Auditor Connie Nass -- to shift $247 million in Build Indiana Fund money to the state's primary checking account and shrink the deficit.\nThe three officeholders make up the State Board of Finance, which must authorize such a transfer of gambling revenue to the general fund. O'Bannon said he will ask Nass and Berry to meet with him April 8 to consider the transfers.\nNass and Berry said they needed time to review the list of state and local projects that would be cut, but both struck conciliatory tones about O'Bannon's request.\n"I would anticipate that we could come to agreement on many of these projects, if not most or all of them, and be able to assist so that we don't have to increase taxes in the state of Indiana," Berry said.\nO'Bannon said he likely will announce more cuts next week because lawmakers did not approve the tax increases on cigarettes and casinos he sought to close the deficit. He said the next cuts likely will include education.\nHe said the Build Indiana Fund projects were important, but were "extras" the state could live without so huge spending cuts in school operating costs might be avoided.\nThe cuts include $184 million for state projects and $64 million for local projects. The state projects include $40 million set aside for schools to buy computers, $29 million for university technology purchases and $50 million to fund research and development initiatives between universities and private industry.\nThey also include $21 million set aside for community sewer and water projects, $9 million to update voting and registration equipment and $5 million for dams.\nThe administration did not have a list of local Build Indiana projects that will be held up, but they include any of those that have not been approved by the State Budget Committee.\nAlso cut Wednesday were $24.5 million in building repairs at universities and nearly $60 million in such work at other state buildings.\nO'Bannon said he could not say how much more he would have to cut.\nHe said lawmakers not only failed to pass tax increases, they also approved some spending measures and adjourned without giving him full legislative approval he needed to cut $250 million in Medicaid, the state and local health care program for the poor and disabled.\nIn addition, some of his Medicaid spending proposals have been blocked by the courts.\n"I'm turning over every rock to find money that we can use responsibly to shore up the basics of state government and help me preserve school funding as best I can," O'Bannon said.\nO'Bannon has not ruled out calling lawmakers back to the Statehouse for a special session. But he said he cannot force reticent lawmakers to work on the budget deficit if they do not want to, and he has seen no evidence enough of them are willing to do so.\nState Sen. Beverly Gard, R-Greenfield, said she approved of the steps O'Bannon took Wednesday, even though some projects in her district might go unfunded.\n"I think everyone is going to have to bite the bullet on this one," she said.\nRep. Patrick Bauer, D-South Bend, said some House Democrats were upset that the governor blamed the entire General Assembly when making his announcement\nBauer said Senate Republicans were primarily responsible for the Legislature's failure to reach a tax-and-budget deal. But he said members of the Democratic caucus felt "betrayed" that O'Bannon did not distinguish between the parties.