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Clock ticks as budget deadline looms

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By Jessica Wray

With one spending plan set to expire and no ready replacement on its way, the clock on Indiana's budget situation ticks louder each day the standoff continues that has halted this year's legislative session.

The current two-year budget expires June 30, and it is up to lawmakers to approve a new one that would take effect July 1.

Though real deadline pressure is still weeks away, the minority Indiana House Democrats who are set to enter their fourth consecutive week holed up in an Urbana, Ill. hotel have indicated they are not afraid to blow that deadline if that's what it takes to win concessions on labor and education bills.

If that happens, what comes next is an untested scenario in which Gov. Mitch Daniels could maintain only emergency powers while the rest of state government would be forced to a halt.

Sen. Luke Kenley, the Noblesville Republican who chairs the Senate Appropriations Committee as well as the State Budget Committee, has studied the situation during previous budget showdowns.

He said the Indiana Constitution grants the governor enough power to keep the Indiana State Police, the Indiana Department of Correction, which runs the state's prisons, state health institutions and other health and safety programs up and running.

"But beyond that, there's not much he can do," Kenley said. "We'd just have to shut down."

Although he said he is unsure where the revenue to continue the emergency programs could come from, Kenley said he thinks there are sales tax receipts and funds that could be tapped to keep the limited number of places open.

"You have some cash balances in the limited number of places that we could keep open in this instance," he said. "I feel confident that there would be enough money coming in to cover this situation."

State parks and museums, the Indiana State Fair, the Bureau of Motor Vehicles and all other state-funded programs and institutions would close come July 1 if a budget bill has not passed the Indiana General Assembly.

Welfare, Medicaid and unemployment benefits — which receive federal funding as well as state appropriations — might be weighed differently if the government came to a halt. Kenley said he did not know if the programs could be funded based on federal dollars alone, without matching funds appropriated from the state.

"The key question is that the money has not been appropriated to do anything, and so the only thing that the governor could presume to do would be for the health and safety type situation as mentioned in the constitution," he said.

Unlike Congress, Indiana's government cannot remain in operation on continuing resolutions, but must pass a budget bill for each biennium.

In 1993, Kenley's first year as a legislator, he said a budget bill won final approval at 11:59 p.m. on June 30. At the time, the Democrats controlled the House and the Republicans controlled the Senate, and Evan Bayh was governor.

He said they had to break a deadlock with a bill that allowed the formation of riverboat casinos, and that was "considered a form of revenue that would solve the budget problems we were having at the time."

"It was a pretty intense situation," he said. "None of us ever thought it would go that long. I think everybody was pretty sobered by that point in time. We just finally reached an agreement. ... We were all so exhausted that we didn't know whether to cheer or to cry."

Kenley said he is confident the budget bill will pass on time, and that the government will not have to halt July 1.

He said House Speaker Brian Bosma (R-Indianapolis) and House Minority Leader B. Patrick Bauer (D-South Bend) are experienced enough to make sure that happens.

"We all see the importance of making sure that we fulfill those obligations, and I just think that everyone of them has a deep enough sense of commitment that they are going to make sure it gets done, even if they're not happy with the result."

As for whether it will again take until 11:59 p.m. on June 30, Kenley said he was not sure.

"I didn't think that two weeks ago," he said. "But I'm beginning to consider it."

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