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Sunday, February 20, 2011

Ind. Gov't. - Focus on Indiana's pending budget: (1) Governor's authority to withhold allotments, and (2) judges' pay raise

(1) Governor's authority to withhold spending of money appropriated by lawmakers.

Lesley Stedman Weidenbener of the Louisville Courier Journal had this story Friday afternoon, Feb. 18, that began:

INDIANAPOLIS — Democrats tried on Friday to strip away Gov. Mitch Daniels’ authority to make cuts in the spending plans written by legislature, but majority Republicans in the House Ways and Means Committee rejected the proposal.

Rep. Scott Pelath, D-Michigan City, offered the idea as an amendment on the $27.9 billion, two-year state budget bill, saying that the plan’s contents won’t matter as long as Daniels has the authority to withhold money appropriated by lawmakers.

“It’s rendering the decisions we make here meaningless,” Pelath said. “We need to reassert ourselves.”

But Ways and Means Chairman Jeff Espich, R-Uniondale, said he’s grateful that Daniels — and Democratic governors before him — have used the power to make the tough choices needed to balance the state budget when the economy sours. In the past two years, Daniels has cut roughly $1 billion in planned spending to keep Indiana’s budget in the black.

“We’re all cowards in this place as legislators, and I’m darn glad that Mitch Daniels did the dirty work,” Espich said.

The GOP-majority committee rejected Pelath’s amendment and then sent the budget bill to the full House on a 15-8 party-line vote. * * *

For decades, Indiana lawmakers have included a provision in their budget bills that authorizes the governor and state budget agency to “withhold allotments of any or all appropriations” if needed to deal with budget shortfalls.

The language gives a governor wide latitude to withhold money from schools, universities, state agencies and outside groups that receive grants. And the authority is not particularly unusual.

In 39 states, governors can reduce budgets without legislative approval, according to a report from the Federal Funds Information for States. But the report does not consider the Indiana governor's authority unfettered because lawmakers can easily take it away.

Indiana is also one of just a handful of states where the governor doesn't have a line-item veto, so Daniels has no authority to cut items from the budget before he signs it into law. He can only withhold the funds once the budget becomes law.

In the past, governors have used that authority to cut spending when tax receipts fell below expectations or when the General Assembly has passed deficit budgets.

The late Democrat Gov. Frank O'Bannon in particular had to slash state spending when revenues dropped during his second term.

But the depth and breadth of the recent downturn has led Daniels to cut even more aggressively. He’s withheld some $450 million that had been allocated to public schools over the past two years, reduced state funding for universities and sliced or eliminated some grants, including those for public broadcasting.

Two years ago, as Daniels was implementing cuts that frustrated some lawmakers, minority Democrats in the Senate sought unsuccessfully to remove language from the 2010-2011 budget that gave Daniels the authority to withhold spending.

For background, see this well-worth-reading May 26, 2010 ILB entry.

(2) No pay raises for state legislators, judges and prosecutors (statutorily tied to state employee salaries).

Deanna Martin's Feb. 18th AP coverage includes:

The budget approved Friday also: * * *

— Temporarily suspends pay raises for state legislators, judges and prosecutors.

The Indy Star's Mary Beth Schneider's Feb. 19th story has similar information:
Daniels didn't mention legislative pay increases in his budget. The House GOP did, putting on hold for two years the automatic 1.3 percent increase that lawmakers, judges and prosecutors were due, mirroring the average increase for state employees.
For background, see this June 7, 2007 ILB entry, headed "Linking of judges' pay to that of legislators decried at both federal and state levels," where I added: "My thoughts: It looks like just at the point in time when everyone else was trying to get out of the boiling pot, Indiana's judges may have been pulled in."

ILB: Although the budget was passed out of House committee Friday, the new language is not yet available online. When it is, it will be found here: HB 1001.

Posted by Marcia Oddi on February 20, 2011 11:25 AM
Posted to Indiana Government