Governor considers special session

INDIANAPOLIS -- Having failed to obtain tax increases to balance the state budget during the regular legislative session, Gov. Frank O'Bannon is now trying to lay the groundwork for calling lawmakers back to work.\nHe said Wednesday he will consider calling a special legislative session to work on Indiana's pressing financial problems, even if he is unable to broker a deal among leading lawmakers beforehand.\n"That's something that may happen, but I certainly want to speak with them and see how we can put together a plan that will work," O'Bannon said after meeting with educators, business lobbyists and others who want a special session.\nSenate President Pro Tem Robert Garton, R-Columbus, said the Democratic governor's motives were clear.\n"He just wants higher taxes, and he's not going to quit," said Garton, who was adamantly opposed to any tax increases during the regular session that ended March 14.\nLawmakers adjourned without passing comprehensive legislation to close the budget deficit or restructure taxes to shield homeowners from higher property tax bills expected under reassessment.\n"He will have (a special session), and he will finally badger the Legislature into raising taxes. I think I said last December that he could break us economically," Garton said of O'Bannon's ability to keep lawmakers at the Capitol and away from their regular jobs back home.\nO'Bannon is scheduled to meet with legislative leaders Tuesday to discuss the state's budget deficit, tax restructuring and the possibility of a special session to address both issues.\nSince lawmakers adjourned, O'Bannon has announced $400 million in new spending cuts and other steps such as account transfers and spending down reserves to help shore up a projected $1.3 billion shortfall.\nAlthough his overall plans are expected to keep the state solvent through the two-year budget cycle that ends in July 2003, O'Bannon said Indiana will still be in serious financial trouble.\nIt still would take $800 million in new revenue during the next biennium just to keep spending levels the same for such things as schools and universities, state agencies and social programs that fall outside of federal mandates, according to his administration.\nThe governor's office released figures Wednesday showing that state tax revenue in March was $54 million, or nearly 9 percent, below the fiscal forecast in November. For the first nine months of the fiscal year, revenues are $92 million below expectations.\nO'Bannon's press office billed Wednesday's event as a meeting between O'Bannon, Lt. Gov. Joe Kernan and "thought leaders" to discuss the state's financial problems.\nIt was no surprise that their unified stand was for a special session, because most are members of a group called Alliance for Indiana's Future that already advocated a legislative overtime.\nThe group includes the state's seven public colleges, the Indiana State Teachers Association, the Indiana Association of Realtors, the United Auto Workers and the Indiana Chamber of Commerce.\nDuring the regular session, the Democrat-led House and Republican-ruled Senate each passed plans that would raise some taxes to make substantial cuts in property taxes.\nBut unlike the House plan that O'Bannon backed, the Senate GOP proposal would not have used any revenue from tax increases on cigarettes or casinos to shore up the deficit. Senate Republicans have insisted that O'Bannon can manage the deficit without tax increases or huge cuts in education.\nGarton said it was easy for O'Bannon to assemble special interest groups that stand to benefit from tax increases.\n"Now what he needs to do is pull together an alliance of average citizens who want a tax increase," he said.