Statehouse Report 15

April 21, 2009

LEGISLATIVE DEVELOPMENTS

The Senate passed its version of the budget bill last week. On Friday the state revenue forecast update was presented to the State Budget Committee, and unfortunately, projected state revenues were reduced substantially, as discussed below. Finally, the second and third reading deadline passed, and any bills that did not pass third reading died.

Biennial Budget Bill (HB1001)

In the Senate, the biennial budget bill was subjected to second reading, at which time a number of amendments were presented, but only two passed. On third reading the bill passed, 32-18.

The following provides a summary of key higher education provisions in each version of the budget bill.

House Budget

The House budget is a one-year budget. In addition, details on the federal stimulus bill were not available at the time the House budget was passed, and thus, federal State Fiscal Stabilization Funds were not included.

• Operating Funding: Institutions were provided a 1 percent operating increase plus limited additional funding for enrollment increases.
• Capital funding: All of IU's requested projects were authorized. In addition, capital projects from the current biennium that have not yet been reviewed and approved by the state were authorized to be started ($27 million for IU South Bend Education Arts Building and $20 million for the first phase of the Neurosciences Building for the School of Medicine at IUPUI). R&R (repair and rehabilitation) funds to maintain existing facilities were appropriated at $12.6 million for IU's system for FY 2010, and $12.6 million in R&R funds cut in FY 2009 were restored.

• Indiana Innovation Alliance: IU's joint initiative with Purdue was fully funded at $35 million.

Senate Budget

• Operating Funding: Institutions were straight-lined at FY 2009 appropriation levels plus additional limited funding for enrollment increases and for increases in the number of students that graduate in four years (the Bloomington campus and health programs at the Indianapolis campuses are not eligible for enrollment and four-year degree completion funding). It is important to note that state general fund appropriations were cut by 1 percent for each of the two years of the biennium, but these cuts were replaced with federal stimulus funds. In addition, the 1 percent cut in operating funding for FY 2009 was restored using federal stimulus funds.
• Capital funding: Three IU projects were authorized (Northwest Campus Tamarack Hall at $33 million; Life Science Lab renovations at $10 million for both the Bloomington and Indianapolis campuses; and $6 million for a new Center for Medical Education facility at West Lafayette). As with the House bill, capital projects from the current biennium not yet reviewed and approved were re-authorized. R&R funds to maintain existing facilities were appropriated at $12.6 million each year of the biennium for IU's system. Again, as with the House bill, $12.6 million in FY 2009 R&R funds that were cut by the administration were restored.

• Indiana Innovation Alliance: IU's joint initiative with Purdue was funded at $27.5 million per year.

IU is very grateful to the General Assembly for the support legislators have provided through funding that was included in both the House and the Senate passed versions of the budget. We believe that legislators have demonstrated their understanding of the key role that IU and its sister institutions play in the state's future.

State Revenue Forecast

The state revenue and economic forecast was presented to the State Budget Committee on Friday. Typically a forecast update is prepared before the conference committee process begins on the state biennial budget to ensure that the negotiators have the most current projections of revenue on which to make state spending decisions. Unfortunately, since the national economy declined at a faster pace than forecast last December, the state revenue projection was reduced by a total of $833 million over the remainder of the current fiscal year and the two years of the upcoming biennium. While this is bad news, the Senate-passed budget incorporated an assumption that revenue would decline by $1 billion during this period. If the revenue forecast had produced state revenue losses greater than $1 billion, cuts to the level of funding in both the House and Senate budgets would likely have been made.

Other Legislation

With committee hearings completed last week, all legislative activity occurred on the floor of the Senate and House for final second and third readings on bills. What follows is a listing of some of the bills that we have been monitoring that passed both the House and Senate (with authors and sponsors listed). Most of these bills will go through the conference committee process to resolve any differences between House and Senate passed versions. Bills that passed the second chamber without change are submitted directly to the Governor. Finally, bills that were changed in the second House, but in a manner acceptable to the author, will be subject to a "concurrence" motion, which, if passed, sends the bill to the Governor.

• SB 39 Veterans Benefits (R. Young, Klinker): The bill would make any Purple Heart recipient eligible for an exemption from tuition and fees at an Indiana public university. Currently the benefit is only for those who served after September 11, 2001.
• 218 Health Provider Issues (Miller, C. Brown): The bill includes a provision that was requested by the Indiana Anatomical Education Board, administered by the IU School of Medicine, which would permit cadavers donated to sciences to be used by educational institutions in other states, which face shortages. Current law permits use within Indiana but donations exceed need.

• SB 254 Voter ID (Breaux, Day): Among other provisions, the bill provides that university issued identification cards that have no expiration date or an indefinite expiration date is sufficient proof of identification to vote.
• HB 1014 Age Discrimination (V. Smith, Kruse): The bill would increase from 70 years of age to 75 years of age the maximum age limit for age discrimination claims.

• HB 1132 Police Powers (L. Lawson, Wyss): This bill, among other provisions, would permit university police to exercise their police powers in any part of Indiana (if authorized by University Trustees) in connection with an offense committed on university property or while assisting another law enforcement officer who has requested assistance.
• HB 1165 Public Safety Survivors Tuition Exemption (Tyler, M. Young): The bill would revise existing statute that exempts the children of a public safety officer who is killed in the line of duty from tuition and fees at a state university by changing the maximum age for eligibility from 22 to 23 and by limiting the benefit to eight semesters.

• HB 1210 Psychiatry Development Programs (C. Brown, Simpson): The bill, which was developed with assistance from the IU School of Medicine, would create mental health services development programs to provide incentives to attract psychiatrists, psychologists, psychiatric nurses, and public sector psychiatrists to practice in Indiana. The bill would also create the loan forgiveness programs for psychiatrists, psychologists, or psychiatric nurses who serve in the state.
• HB 1382 Insurance Coverage for Clinical Trials (Welch, Gard): The bill would require coverage for certain services related to cancer clinical trials under a state employee health plan, the state Medicaid program, a policy of accident and sickness insurance, and a health maintenance organization contract.

• HB 1389 21st Century Scholars (Summers, Boots): The bill, which was signed into law by the Governor, requires school corporations to provide each student who applies for free or reduced lunch benefit with an enrollment form for the twenty-first century scholars program.
• HB 1398 Ethanol Incentives (Grubb, Gard): Among other provisions, the bill would require state educational institutions to purchase mid-level blends of gasoline and ethanol, E85, and blended biodiesel fuel to the extent possible.

• HB 1462 Various Education Matters (Kersey, Lubbers): Among other provisions, the bill would exempt a university from paying for a limited criminal history check for education students beginning their field teaching experiences.
• HB 1455 Autism Training (Tyler, Miller): The bill would require that firefighter and law enforcement personnel be trained in interacting with individuals with autism and would require the department of education to create and distribute to school corporations a document that explains the aspects of autism including behaviors students with autism exhibit.

• HB 1479 Recruitment of Educators (Porter, Lubbers): The bill, already signed by the Governor into law, requires the department of education to collaborate with nonprofit entities, the commission for higher education, and state educational institutions to develop initiatives to recruit and retain educators from underrepresented populations and teacher shortage areas.
• HB 1561 High Speed Internet Service (Van Haaften, Hershman): The bill would require the Indiana Economic Development Corporation to develop a high speed Internet service deployment and adoption initiative and create a statewide geographic information system of telecommunications and information technology services.

• HB 1671 Nursing Scholarships (Michael, Head): The bill would require a recipient of a state nursing scholarship to agree to work as a practicing nurse providing direct patient care for two years.
• HB 1681 Educational Benefits for Foster Care Youth (Summers, Rogers): The bill would establish a new 21st Century Scholars program for youth in foster care.

Looking Ahead

Conference committee negotiations begin on the budget and other legislation this week. There are only ten days for this process to be completed before the legislative session ends on April 29. As we have written in previous reports, during the conference committee process, not only can the language in the bill be amended, but also any bill that passed either the House or Senate but died in the other chamber can be inserted. Thus, the Statehouse team attempts to review every conference committee report that emerges from this process.

This will be the last Statehouse report until the session ends on April 29. At that time we will provide a comprehensive report on the final enacted budget and other key legislation.