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Monday, May 18, 2009

Ind. Law - "Lawmaker adding 'doomsday' to budget planning: Checks if state may tap reserve to stop shutdown"

Eric Bradner writes today in the Evansville Courier & Press:

INDIANAPOLIS — A top Senate Republican budget negotiator says he is investigating a doomsday scenario in case lawmakers and Gov. Mitch Daniels don't agree on a new budget in time.

If the General Assembly doesn't pass — and Daniels doesn't sign — a new budget before the current one expires at the end of June, most of state government would shut down.

Senate Appropriations Chairman Luke Kenley of Noblesville wants to see if Indiana would be able to tap into its $1.3 billion in reserves to keep the state government afloat for an extra month or so.

Kenley told a group of Franklin College journalism students on Friday that he has asked legal experts to determine whether the state can use its reserves in case no budget is passed by June 30.

Doing so, he said, could keep the state government operating for another "30 to 35 days."

"We are in uncharted territory," Kenley said. "I want to know what the options are."

Daniels wants a budget much leaner than the one that passed the Senate but failed in the House in the waning minutes of the General Assembly's session.

However, Democrats and some Republicans have balked at the governor's demand to trim at least $1 billion from that budget.

This research has been done before, in earlier years where budget special sessions loomed.

In addition, here is a provision from the budget bill currently in effect, HEA 1001 from 2007, authorizing an action that apparently would have to be taken before the end of next month -- June 30, 2009:

SECTION 36. [EFFECTIVE JULY 1, 2007] If the budget director determines at any time during the biennium that the executive branch of state government cannot meet its statutory obligations due to insufficient funds in the general fund, then notwithstanding IC 4-10-18, the budget agency, with the approval of the governor and after review by the budget committee, may transfer from the counter-cyclical revenue and economic stabilization fund to the general fund an amount necessary to maintain a positive balance in the general fund.

Posted by Marcia Oddi on May 18, 2009 12:17 PM
Posted to Indiana Law