Daniels vague about spending plans, budget deficit

INDIANAPOLIS -- Gov.-elect Mitch Daniels and newly empowered House Republicans are eager to push their campaign proposals in the General Assembly, but they still aren't saying how they will tackle Indiana's fiscal problems or what the state's next budget will look like.\nThey say they simply do not have a script for that yet.\n"Any budget decisions will have to wait until we understand, finally, the full dimension of this problem," Daniels said.\nThat means more than Indiana's $830 million deficit, he said. The state also owes more than $710 million in back payments to schools, universities and local governments. And Daniels is concerned about the health of state pension plans.\nIncoming House Speaker Brian Bosma, R-Indianapolis, said longtime Republican Rep. Jeff Espich of Uniondale, Ind., will be chairman of the Ways and Means Committee. As such, he will be a prime architect of a two-year budget lawmakers must pass next year.\nBosma said Espich will lead a budget "SWAT team" that will include legislators and staff members who have experience with state fiscal matters.\nHouse Republicans, who won control of the chamber Tuesday after eight years in the minority, have repeatedly blamed Democratic governors and House Democrats for the state's deficit and other fiscal problems.\n"We're going to have to dig out of that hole, and we're going to have to do it with discipline, and we're going to have to take a fundamental look at every aspect of state spending, and that is where we're going to start," Bosma said.\nLike Gov. Daniels, House Republicans have said tax increases should be a last resort.\nGOP lawmakers also have called for limiting appropriations to 99 percent of projected revenue collections. That proposal was part of their campaign platform.\nBosma said the spending cap might be impossible to meet in the upcoming two-year budget, given the severity of Indiana's fiscal crunch. But he said House Republicans still want to enact such a cap for budgets that follow.\nLawmakers know there are few easy answers. Special interest groups likely will fight any sweeping spending cuts, and there will be pressure to increase spending in some areas, especially education.\nA 1 percent increase in school funding in each of the next two years would cost about $300 million in new money.\nDaniels said Bill Oesterle, who managed his campaign, will spend the coming weeks analyzing the state's finances and recommending options.\n"I'm going to want to see every option that might contribute to the swiftest balancing of the state's books," Daniels said.\nDaniels, who spent more than two years as White House budget director under President Bush, suggested that his administration would have to act "on the spending side of government in a very vigorous way." That likely would mean fewer state employees, he said, but it is unclear how many jobs might be affected.\nHe said his legislative package would mirror many of the proposals he touted during the campaign. "There won't be any new surprises," he said.\nLater, during a news conference, he amended that comment.\n"The exception to that might be things we have to do about the budget, which are yet to be determined," he said.