O'Bannon's plan will see long road ahead

INDIANAPOLIS -- When Gov. Frank O'Bannon and Lt. Gov. Joe Kernan rolled out a big economic-development proposal last week, they played up merits of taking the offensive.\n"We have a choice: We can sit and wring our hands and bemoan the recession, or we can act assertively, decisively, deliberately, so that when the economy turns, Indiana will be ready to explode," O'Bannon said.\nSaid Kernan: "The present defense doesn't work. All it does is prevent you from winning."\nThey seemed well prepared for criticism, and tried to put naysayers on the defensive.\n"Some doubt we can pass such a bold program, as many doubted that we could restructure our tax system," O'Bannon said. "But with bipartisan action, we proved them wrong.\n"Together, we can do this. We must do this. We will do this."\nSuch proclaimed confidence is understandable, of course.\nNobody has ever tiptoed a sweeping, controversial proposal through the Indiana General Assembly. Wishy-washy approaches never win the day.\nBut it will take more than assertiveness to get most of the plan through the ever-changing maze of politics, special interests and legislative egos that dominate the third floor of the Statehouse.\nThe plan would borrow $692 million against a portion of future tobacco-settlement payments, tap another $195 million from a tobacco trust fund, and invest those and other dollars in business research, job training and schools.\nResearch grants, college scholarships and other parts of the plan would be targeted to creating high-skill, high-wage jobs in four industry sectors -- advanced manufacturing, life sciences, information technology and distribution.\nOn the plus side for O'Bannon and Kernan, the proposal won praise from some lawmakers in both parties for its focus on creating jobs and retooling Indiana's economy.\nHouse Minority Leader Brian Bosma, R-Indianapolis, called it "the best program I have seen brought forward in six years of the administration." It should have been proposed six years ago, he said, but it was a start.\nO'Bannon needed support from business lobbyists to get tax-restructuring through the General Assembly during the special session in June, and he will need them again this time. On that front, he's off to a good start.\nBut there are plenty of critics, too.\nRep. Charlie Brown, D-Gary, chairman of the House Public Health Committee, called it a case of robbing Peter to pay Paul. That's bad news for O'Bannon, since House Speaker B. Patrick Bauer, D-South Bend, wants Brown's committee to first consider the tobacco-payment provisions of the plan.\nSeveral Republicans, including state Treasurer Tim Berry, called the key part of the proposal bad business. Fiscal leaders in the GOP-dominated Senate, including Senate Finance Chairman Larry Borst, R-Greenwood, agree with him.\nInstead of borrowing against 40 percent of future tobacco payments to get $692 million up front, as the plan calls for, the state could take in $1.6 billion over the next two decades, Berry said.\n"Essentially you are mortgaging your home to pay for this week's groceries, and then realizing that next week you still have to buy groceries and you have no funding source to do so," Berry said.\nThe plan also does little to address state government's most immediate, pressing problem -- a $760 million budget deficit.\nTop Senate Republicans say the plan will get no serious consideration until O'Bannon and Kernan present a serious proposal for balancing the books.\n"They are not facing up to the budget issue, which is the next thing we have to do," said Sen. Luke Kenley, R-Noblesville.\nO'Bannon and Kernan also face a new political landscape in the House, where Bauer is speaker now, and pro-labor Democrats who helped elect him have a louder say. A lot of them think the tax plan passed in June was too pro-business. And now this?\n"We will do this," O'Bannon said in announcing his economic-development plan last week.\nGood luck.