Governor calling back lawmakers

INDIANAPOLIS -- Gov. Frank O'Bannon said Tuesday he will call lawmakers back to the Statehouse next month for a special session aimed at resolving the state's financial crisis.\nThe Democrat said he hoped lawmakers would work toward resolving their differences over balancing the budget and restructuring taxes. However, if leaders cannot reach a deal in coming weeks, he said he would call the full General Assembly back to work May 14.\nLawmakers adjourned the regular session March 14 without passing comprehensive legislation addressing either the projected $1.3 billion budget deficit or tax restructuring.\n"We feel something needs to be done this year," O'Bannon said after a two-hour private meeting with caucus and fiscal leaders.\nO'Bannon insists balancing the budget will require tax increases, which he considers a prerequisite to adequately funding education and social services and overhauling taxes. He plans another meeting with fiscal leaders on Thursday.\nLawmakers last held a special session in 1997, when O'Bannon called them back to resolve differences over a two-year budget and other tax matters. The last time an overtime session was held following a short legislative session was 1982.\nLeaders from both parties have been cool to the idea of a legislative overtime, and leaders expressed little optimism they could settle their differences in the coming weeks or during a special session.\n"I know the governor is in a very terrible situation, and I just think that he might feel he has no other choice. But sometimes you can't do the impossible," said House Ways and Means Chairman B. Patrick Bauer, D-South Bend.\nSenate President Pro Tem Robert Garton, R-Columbus, said little after Tuesday's meeting and Senate Finance Chairman Larry Borst, R-Greenwood, deferred comments to Garton.\n"We said, 'You call it and we'll show up,'" said Garton, who has adamantly opposed raising taxes this year during a recession.\nWhen asked if thought a special session would be successful, he said, "We'll just wait to see what happens."\nAlthough O'Bannon has made additional spending cuts since the regular session ended, he says tax increases are still needed to balance the budget. He wants to raise taxes on cigarettes and casinos, and suspend two income tax cuts approved in 1999 to shore up the deficit.\nThe Democrat-led House and Republican-ruled Senate each passed plans that would raise some taxes in order to make substantial cuts in property taxes. Those efforts were aimed at promoting economic development and shielding homeowners from higher property tax bills under reassessment.\nBut unlike the House Democratic plan backed by O'Bannon, the Senate GOP version would not have directed any revenue from tax increases on cigarettes and casinos to help balance the books. It also would not have rolled back the two 1999 tax cuts O'Bannon wants to suspend.\nSenate Republicans have insisted that O'Bannon can manage the deficit on his own by making spending cuts, account transfers and tapping reserves.\nThey say that under O'Bannon's own plan, the state could get by without tax increases or major cuts in education and still end the two-year budget cycle in July 2003 with $390 million in ready reserves.\nO'Bannon has said that would barely be enough to meet cash-flow obligations, and the state would still need $800 million in new revenue during the next biennium just to maintain spending levels for schools, state agencies and social services that fall outside federal mandates.\nAlthough the governor can call a special session, he cannot guarantee its success.\nHe acknowledged that some lawmakers are irked at him. Among other things, he said some were concerned about the possibility of being in special session for more than a month.\n"I'm always optimistic, but I'm not as optimistic as I normally am," he said about the prospects of solving the fiscal problems.\nSen. Vi Simpson, D-Bloomington, described Tuesday's meeting as sometimes "acrimonious."\n"People were accusing the governor of treating them like they were naughty boys and girls being called before the high school principal to be chastised," Simpson said. "In truth, some of us have been naughty boys and girls by not taking care of the responsibilities were elected to do"