Republicans draw close to budget compromise

INDIANAPOLIS -- Fiscal leaders for House and Senate Republicans were close to compromising on a two-year state budget proposal and were expected to reach a deal later Tuesday, a top lawmaker said.\n"I think we'll be totally done by the end of the day," said Republican Rep. Jeff Espich of Uniondale, chairman of the budget-writing House Ways and Means Committee. "We're going to continue to talk, but I would call them minor details at this point."\nThe regular session must end by midnight Friday, but House Republicans have said they wanted a budget deal finalized at least 24 hours before it is voted on.\nAlthough Espich had said earlier that he hoped a final budget could win bipartisan support, he said Republicans likely would have to pass a plan on their own. Republicans control the House 52-48 and the Senate 33-17.\n"Unfortunately I don't think (Democrats) have been of a mind since day one to support a budget, and I don't think they're going to no matter what it does (without them writing it)," Espich said.\nDemocrats say budget plans passed by House and Senate Republicans rely too heavily on property taxes and do not adequately fund public schools. They also say major changes Republicans are seeking in the way money is distributed to schools will mean cuts to more than 100 districts, especially those in poor areas of the state.\nAlthough it is possible that Republicans could pass a budget on their own, Democrats in either chamber could prevent votes by staying off the floor and denying quorums needed to conduct business. House Democrats staged such a protest about other matters earlier this session.\nThe House and Senate budget plans would both spend about $24 billion through two years, although the Senate version relied on a cigarette tax increase and taking about $75 million a year from casino tax revenue from communities with riverboats to spend more money on schools and Medicaid.\nBut Espich said the riverboat redistribution plan was off the table, and tax increases as an option were on "life support at best." That would include cigarette tax increases and proposals that have been floated to raise casino taxes.\nThat means there might be no new state revenue in the plan and leave less in cash reserves than Republican Gov. Mitch Daniels wants, Espich acknowledged, but he said, "If we can achieve a budget that we believe adequately funds our responsibilities, that is our goal."\nHe said the compromise plan would erase the state's projected $645 million budget deficit by the end of the two-year budget cycle, which begins in July and ends in June 2007.\nDaniels has said he wants to eliminate the deficit by the end of the first fiscal year in June 2006.\nDetails were still being worked out regarding how much of an overall spending increase schools would get, but Espich said it would be higher than the 0.7 percent the House GOP plan included for each of the next two years. The Senate version would have provided increases of 1.2 percent in the first year and 1.3 percent in the second.\nThe tentative compromise also would fund Medicaid growth at 5 percent per year, still less than the increased costs projected by state officials in the health care program for the poor and disabled. But it is still 2 percent more than the House included in its original budget and meets a funding goal set by Daniels.\nRep. William Crawford, D--Indianapolis, the top Democrat on Ways and Means, said Monday that Republicans had not included Democrats in any serious budget negotiations. Democrats also have complained that they wanted to have input but did not know which plan to respond to -- the House GOP plan or the Senate Republican version.\nEspich said he had yet to run the plan past Daniels, but he said the governor should be pleased in many respects.\nStill, he said, "They're going to be concerned that they would like to have higher reserves, and I understand that."\nAnother major bill pending would help finance a new stadium for the NFL's Colts and expand the convention center in downtown Indianapolis. It is possible a plan that could pump more than $25 million per year into northwest Indiana for such things as airport and regional rail expansions, and improvements to the Lake Michigan shoreline could become part of that legislation.\nBut the most contentious bill of the session -- one to mandate statewide observance of daylight-saving time -- also was pending. It is expected to be voted on by the Senate Wednesday, and if it passes there, it must clear the House a second time to reach Daniels' desk. He is a strong proponent of the bill.