IU Statehouse Report 12
April 11, 2005
LEGISLATIVE DEVELOPMENTS
Indiana economic and fiscal forecasts were released today. They provide estimates of Indiana's economic and fiscal prospects over the next two years and set the parameters for the remaining budget deliberations. In short, the state's economy will see modest growth if current trends continue. State revenues are expected to essentially be flat for the biennium, with net state revenue projected to increase approximately $21 million over the next two years.
The forecasts are largely driven by higher Indiana non-farm personal income that was impacted positively by a one-time Microsoft dividend of $32 billion.
A more detailed summary will appear in the next Statehouse report.
Indiana Senate approves revised tax bill
This past Thursday, the Senate, on a vote of 27-22, sent its 284-page tax measure, House Bill 1120, to the House. Republicans are voicing concerns about a new local income tax plan. "There are parts of the bill we support strongly and parts of it we're going to have to take a hard look at," said the bill's author Rep. Jeff Espich (Uniondale).
Included in the new tax plan is a 19-cents-a-pack cigarette tax increase that could raise an additional $114 million per year. This money would help provide public schools an additional 1.2% next year and 1.3% in 2007. "If there is anything we can go for, it's sin taxes," remarked Rep. Espich. Tax increases on restaurants in the regional Indianapolis area, auto rentals in Marion County, stadium admissions and hotel rooms would also raise approximately $54 million a year to help pay for the new Colts stadium and the expansion of the Indiana Convention Center.
The new tax plan would divert an additional $70 million a year from communities with riverboat casinos, offer automatic tax breaks for investments in business equipment and create or expand tax breaks for research, filmmaking and the motor sports business. Property tax relief payments would be capped under this measure. To replace these lost subsidies in the future, public schools and local governments would be allowed to raise either local income taxes or property taxes.
The Senate budget plan depends on the revenue enhancements in this bill. Otherwise, the state will not have enough revenue to fund the spending in the budget bill.
Senate budget plan increases IU facilities-related funding but cuts operating budgets
As of this writing of the Statehouse Report, the Senate is debating its budget plan for higher education.
The amended version of HB1001 provides much-needed funding for the maintenance of IU facilities, providing more than $15 million over the next two years for repair and rehabilitation of facilities and debt service on new buildings on IU campuses. It also authorizes two important renovation projects -- the Central Heating Plant at IU Bloomington and the Associates Building at IU South Bend.
However, the Senate budget plan cuts overall operating funding at IU by $5.5 million, or 1.2 percent over the next two years. Six IU campuses face operating budget cuts under this scenario, with IU Bloomington being cut by $3.4 million (or 1.7 percent) and the operating budget of the IU School of Medicine reduced by $1.2 million (or 1.2 percent) over the biennium. To view a comparison of the Senate's proposal with IU's request, click here.
The budget bill will now be considered by a conference committee made up of representatives of each of the four caucuses in the Indiana General Assembly. The IU Government Relations team is working with legislators, campus chancellors and HHE community captains to explain the impact of the Senate budget plan and encourage legislators to provide additional funds to offset these cuts.
The legislature has until the last Friday in April to pass a budget plan.
Cloning Bill passes out of the House intact
Senator Pat Miller's (Indianapolis) bill with regards to regulations on stem cell research and the prohibition of human cloning (Senate Bill 268) has passed out of the House intact. The bill will now move back to the Senate. This bill had strong support from IU and the IU School of Medicine. Members of the School's faculty and staff were instrumental in refining the language of the original bill in order to maintain the competitive integrity of stem cell research in the State of Indiana.
Update on other bills of interest
The following bills have been included in previous Statehouse Reports throughout this legislative session: SB202 --Grants IU permission to sell bonds for the purchase of the hotel connected to the IUPUI Conference Center. Going to Conference Committee SB200 -- The CORE 40 bill mandates a Core 40 curriculum in high schools for admission to state supported universities beginning in 2010-11. Going to the Governor's desk for signing SB452 --The 21st Century Research and Technology Fund would allow bonding of $1 billion over a 10 year period for 21st century research and technology by universities and private entities. Eligible for 3rd reading. To read more about the importance of this legislation to IU, read this article from the Indianapolis Star.
This week at the Statehouse
This will be a very busy week at the Indiana Statehouse. Conference committees will begin Tuesday, where various measures passed by both houses will be refined and considered between now and the last Friday in April, when the legislature must conclude its business.
Look for more Action Alerts as we closely monitor Statehouse activities.
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This report has been brought to you by the Indiana University Office of Government Relations with help and technical support from IU University Relations and Corporate Partnerships. Staff members from the Office of the Vice President and Chief Financial Officer and the Office of the Vice President and Chief Administrative Officer are frequent contributors to this report.
Please contact IU Government Relations via e-mail at gov@indiana.edu or by phone at 812.855.1970 if you have comments, questions or suggestions for improvement.
