Tuesday, June 25, 2002 ! Volume 8, Number 38 Page 1 of 9 How an epic tax bill The morphed into law Howey !"#$%&'()*+$#'&,-. By BRIAN A. HOWEY in Indianapolis The House vote Saturday evening stood at 54-43, and the concurrent resolution to supplant the tax code last Political tweaked a generation ago looked dead. The sponsor, Ways and Means Chairman B. Patrick Bauer, made what was uni- versally described as a “half-hearted” speech to get the votes Report (“this glass is half-empty or half-full”); then waved off con- cluding remarks, simply saying, “Let it roll.” The Howey Political Report is published by NewsLink Yet after the vote there was little panic among lobby- Inc. Founded in 1994, The Howey Political Report is ists in the hallways outside the House. A concurrent resolu- an independent, non-partisan newsletter analyzing the tion can have nine lives. There was little of the pandemoni- political process in Indiana. um that followed the House vote on June 6 when ailing Rep. Brian A. Howey, publisher Dale Sturtz was missing. On this Saturday night, House Mark Schoeff Jr., Washington writer Minority Leader Brian Bosma had retreated to his office, Jack E. Howey, editor only to find Sen. Larry Borst holding a cup of coffee, gently twisting the arm of Rep. Cleo Duncan. The Howey Political Report Office: 317-254-1533 House Speaker John Gregg, described as “an amaz- PO Box 40265 Fax: 317-968-0487 Indianapolis, IN 46240-0265 Mobile: 317-506-0883 ing mix of the most lovable guy and the most undisciplined manager” by a colleague, returned to his office and went to [email protected] www.howeypolitics.com work. The speaker announced to his team, “We are going to get this thing passed. We need Washington office: 202-775-3242; four more votes.” Bauer ques- Business Office: 317-254-0535. tioned the immediacy of the situ- Subscriptions: $250 annually via e-mail or ation before Gregg asked him to fax; $450 annually including the HPR Daily help produce. The leadership Wire. Call 317-254-1533 or 254-0535. went through the names: Reps. © 2002, The Howey Political Report. All rights Denny Oxley, Scott Pelath, reserved. Photocopying, Internet forwarding, faxing or Clyde Kersey, all supporters of reproducing in any form, in whole or in part, is a viola- Bauer’s bid for speaker. There tion of federal law and is strictly prohibited without was Rep. Russ Stilwell, who consent of the publisher. agreed to switch after getting an OK from labor. It had been a day of soul-searching for Democrats. In his bid for speaker, Bauer had promised millions of dol- lars of budgetary “sprinkles,” particularly to the Black Caucus. During morning and afternoon caucuses, the “He was playing three-dimensional chess Democrats had heard from Lt. Gov. Joe Kernan, who asked while the rest of us were playing checkers ....” them to pass the bill. Gregg said it was Reps. Dan Stephen- son, Duane Cheney, and John Day “who spoke most elo- - State Sen. Teresa Lubbers, on Senate Finance quently” in favor of passage. Gregg called Bosma and said, “It’s time to end this.” Chairman Larry Borst’s role in getting tax restruc- Bosma agreed, although neither would cast an affirmative vote, creating just one of the most interesting historic quirks. turing passed continued on page 2 Tuesday, June 25, 2002 Page 2 of 9

SCHULTZ TO BE NEW BUD- GET DIRECTOR: Sources have told HPR that former legislator Marilyn Schultz will be named budget direc- tor by Gov. Frank O’Ban- non.

INDIANA SENATE VOTE ON HB1001SS: Here's how members of the Indiana Senate voted Friday on a tax-increase and tax- Bosma was coming up with his own list: Indiana Chamber and Manufacturer’s restructuring plan. It was Reps. Matt Whetstone, Richard Mangus, worked to provide the votes. The Alliance approved 33-15. Rich McClain and David Yount. for Indiana’s Future, a patchwork of com- Republicans for (21) Alting, “Bosma and I really matured in our mon and adversarial organizations, teamed Borst, Bray, Ford, Gard, relationship,” Gregg said. “It got to the up to push for a solution. And Gov. Frank Garton, Hershman, Jackman, Johnson, Kenley, point where Paul (Mannweiler) and I O’Bannon, who seemed to move only in Landske, Lawson, Long, were. The leaders must have a good pri- the shadows, played the role of grand Lubbers, Merritt, Miller, vate relationship where they can speak arbitrator while critics howled that he was Riegsecker, Skillman, freely, openly and honestly. I commend “missing in action.” Waterman, Weatherwax, Bosma for saying they had some folks It took God six days to create the Wyss. Republicans against who would vote for it a second time.” heavens and earth; and it took the (10) Adams, Clark, Meeks, On the second tally, the votes slow- O’Bannon-Kernan administration and the Meeks, Nugent, Paul, ly were compiled until it reached a cli- Indiana General Assembly eight months Server, Wheeler, Young, mactic conclusion, 51-45. It joined past and seven mind-numbing days with little Zakas. Democrats for (12) Alexa, Antich, Bowser, milestone efforts in 1963, 1973, 1982 and rest to accomplish something that Broden, Hume, Lanane, 1987. appeared to be much more complex -- to Lewis, Mrvan, Rogers, bring Indiana’s tax code into the 21st Simpson, Sipes, Young. Who would have believed? Century ... less than five months before an Democrats against (5) No one -- no one -- could have election. Blade, Breaux, Craycraft, fathomed the last seven days of the first Here’s how it happened: Howard, Lutz. Not voting -- special Indiana General Assembly session Harrison (R), Smith (D) of the 21st Century. Brian Bosma and John Gregg INDIANA HOUSE VOTE ON There was a pending leadership For Gregg, it was a legislative cap- HB1001SS: Here's how vacuum in the majority House party and stone, the exclamation mark on a 16-year members of the Indiana active campaigns for speaker. Bosma and career that at one point suggested further House voted Saturday on a Gregg were horse trading votes. Two service in Congress, or at least in plush sweeping tax-restructuring political enemies -- the once recalcitrant offices on the Statehouse second floor. plan. The plan passed 51- Sens. Larry Borst and Robert Garton -- “John just wanted to go back to Sandborn, 45. Republicans for (12) stepped up and presented a united front but not on a low note,” Rep. Winfield Ayres, Cherry, Espich, against “the gamers.” Minority Senate Moses observed. Hoffman, Mangus, McClain, Munson, Scholer, Ulmer, Democrats and renegade Republicans His last three votes were jaw drop- tried an end-around Borst and Garton, pers, each against his governor’s tax Continued on page 3 fearful of a stalemate. The ISTA and the restructuring goal. While Gregg held true Page 3 of 9 Tuesday, June 25, 2002 to his own efforts to stem the “expansion think a second special session would have of gambling,” he paved the way for a his- been disastrous for the state and the insti- toric compromise and retrieved the votes tution of the legislature,” the Indianapolis when it mattered most. Republican said. “Or no bill passing For Bosma, it was an elevation of would have brought one that would have his career, a breakthrough as a real power been closer to the original House Demo- broker. When the two hugged on the cratic version. While I did not want to Whetstone, Young, Yount. House floor after sine die, Bosma would vote for it, I knew there were those on the Republicans against (33) say, “That was the end of our service bubble who were willing to bring the Alderman, Atterholt, Becker, together. That was his last act. process to a close. Those folks did what Behning, Borror, Bosma, “We had been talking all day. We they wanted to do.” Brown, Buck, Budak, Buell, Burton, Dillon, Dumezich, had probably 10 conversations over the And there was the courageous vote phone.That’s the way the legislative Duncan, Friend, Frizzell, by Rep. Dean Young in February to keep Herndon, Hinkle, Kruse, process works. You have to have the com- the process alive during the regular ses- Lutz, Mock, Murphy, Noe, munication, unless you have a clear work- sion, something minority Democrats did Pond, Richardon, Ripley, ing majority. I don’t know if there was to keep Doc Bowen’s plan alive in the Ruppel, Saunders, Smith, any horse trading. Due to lack of adminis- Senate back in 1973. There was Rep. Jeff Thompson, Torr, Turner, tration’s involvement in the process, leg- Espich, who helped engineer the House Wolkins. Democrats for (39) islative leaders had to step in and get the Republican economic incentives that were Aguilera, Avery, Bauer, Bodiker, Bottorff, Brown, job done. I’ve served in six or seven spe- lauded, rejected, and finally worked into Cheney, Cochran, Cook, cial session, and there’s always been the final plan. Espich would part with strong gubernatorial leadership to bring Crooks, Crosby, Dobis, Bosma and vote yes on the final bill. Dvorak, Frenz, GiaQuinta, the process to a close. That was not the “We’ve had discipline in the caucus Goodin, Grubb, Harris, case this year. Legislative leaders had to without being heavy-handed,” said House Hasler, Harrell, Kersey, step up to the plate.” Republican communications director Tony Klinker, Kromkowski, Not only did Bosma find four addi- Samuel. “Throughout the process we Kruzan, Kuzman, Lawson, tional GOP votes on Saturday, he person- chose to be positive and work toward a Leuck, Mahern, Moses, Oxley, Pelath, Reske, ally directed an agonizing stare-down vote solution. That’s what you saw when Brian on June 6 that sent the bill to a Senate in Robertson, Smith, went to Mary Kay Budak.” turmoil. In the subtle pandemonium of Stevenson, Stillwell, that day with an elusive 51st vote, Bosma Tincher, Weinzapfel, Welch. began protesting. “Chill, Bosma, or you’ll B. Patrick Bauer Democrats against (12) Adams, Bardon, Bischoff, be back in the hospital,” Gregg shouted to The Democratic Ways and Means chairman was the almighty rogue. When Crawford, Denbo, the histoplasmosis-afflicted Republican. Dickinson, Fry, Gregg, Gov. O’Bannon deferred to him at the Bosma rushed from his front row Liggett, Lytle, Porter, seat to Rep. Mary Kay Budak, whose light start of the May 14 special session, some Summers. Not voting -- was glowing nay. “Is it 50 now?” the wondered who was really governor. Or Foley (R), Steele (R), Sturtz LaPorte Republican nervously asked her speaker in waiting. The pending retire- (D), Day (D). caucus leader. Bosma glanced up at the ments of Gregg, Reps. Mark Kruzan and board and faced the most dramatic deci- Susan Crosby added the truly surreal layer DAY, STURTZ, FOLEY, sion of the year. If House Bill 1001ss did- to the special session. Unprecedented. It STEELE MISS HISTORIC VOTE: Rep. John Day, D- n’t get 51 votes, the issue would be dead. was a setting of power plays, mirages, Indianapolis, voted "yes" paybacks and promises. The last Bauer Whetstone’s light on the tally board final- the first time but was not ly went nay, and Budak nervously fin- regular session plan was so controversial present for the final vote. He gered her button. Bosma glanced at the that Senate Republicans walked away apparently went to tallyboard one last time, then grimaced from it with 36 hours left. Now Bauer was Shapiro’s Deli for a bit to and told her, “Do it.” back, promising millions to potential sup- eat after the first vote and Bosma walked a fine line between porters. For instance, Rep. Earl Harris got got back just after the sec- caucus discipline and allowing legislators $10 million for a Gary harbor develop- ond. State Rep. Vern to vote their conscience and district. “I ment no one else wanted. continued on page 4 Tuesday, June 25, 2002 Page 4 of 9

When Bauer seemed to come press) let him shift his position every around to Republican viewpoints, Espich other day.” asked him on the House floor, “How In March, when he eloquently much in new spending?” The answer was moved the original tax restructuring bill a staggering average $1 billion a year. off the Senate floor, it seemed like he was But Bauer’s real problems began seeking a solution. But when the Senate Tincher stayed for both votes despite receiving three weeks ago, when Times of Republicans threw in the towel on March word on the House floor Northwest Indiana reporter Terry Burns 13, some 36 hours before the end of the that his sister had died broke the story about a $10,000-a-head regular session, it seemed questionable. unexpectedly. Rep. Dale fundraiser for Bauer attended by members Two events occurred that seemed to Sturtz did not vote because of the gaming community during the spe- bring Borst and Garton around: the April he was recovering from cial session. When the Indianapolis Star and May revenue reports that revealed triple bypass surgery. Rep. finally picked up on the story with one about a $200 million shortfall. Brent Steele was vacation- week left in the session, the reaction badly The train wreck had happened. ing in Costa Rica. Rep. surprised Bauer. On Saturday morning, Ralph Foley was said to be While Garton lamented the special sick. the Star was reporting that Bauer was session, saying the governor “always gets under investigation by Missouri officials, his way,” his signals from May 14 for- WHAT THE TAX PLAN and editorialized that Indiana should be ward suggested action. “There was no DOES: The bill will divide probing, too. On the House floor, Bauer question that he was engaged in this $33 million in annual gam- would note on Saturday, “The same peo- process from the time we went back in,” bling profits among coun- ple who attend your fundraisers attend Kernan said of Garton. “His leadership ties that don't already reap mine.” Bauer’s problem was that some of had a lot to do with it.” financial benefits from casi- the speaker votes were still pushing for “What happened in the Senate nos. The bill also will the goodies; thus the “half full, half increase the sales tax to 6 turned into ‘who’s going to run this percent starting Dec. 1 -- empty” speech and the complaints that the place,’” said the IMA’s Pat Kiely. When after the Nov. 5 election and administration had jerked away $400 mil- HB 1001ss passed the House on June 6, before the Christmas shop- lion of a coveted billion. Sen. Robert Meeks was in the back of the ping season. It will raise the Still, Lt. Gov. Joe Kernan and the chamber and Chairman Bauer was quick state's homestead credit to IMA’s Pat Kiely praised Bauer for making to name him the Senate sponsor. By that 20 percent; increase the the bill more business friendly. When it following Monday, it was Borst who had renter's deduction by $500 finally was sent to the Senate on D-Day, wrested back control. to $2,500; and tie the state's everyone knew it was in for a makeover, Earned Income Tax Credit There was a lot of speculation something Bauer would call a “16-week to 6 percent of the federal about the Borst and Garton rivalry. After credit. In addition, it will solution.” the spring revenue numbers, they ended phase out the business up on the same page and, working in tan- inventory tax over five Larry Borst dem, were truly a remarkable force. Any years; create a tax credit for State Sen. Teresa Lubbers described notions of a Senate power realignment are venture capital firms that Senate Finance Chairman Larry Borst’s fantasy for at least the next two years. finance start-up firms; elimi- critical role in tax restructuring like this: Borst and Garton are at a power apex, nate corporate gross income tax; and double the “He was playing three-dimensional chess their legacy billowing to new proportions. research tax credit to 10 while the rest of us were playing check- Their most audacious move was seizing a percent. Finally, it will ers.” suggestion out of the governor’s office a increase the cigarette tax 40 Watching Borst operate in what week before the climactic vote aimed at a cents a pack, to 55.5 cents; HPR had often called the “three-ring cir- concurrent resolution. They embraced it. and raise the gasoline tax cus” was akin to being in a fun house with “By not sending a bill to the conference by 3 cents a gallon, to 18 the concave mirrors, with plenty of smoky committee, they essentially controlled the cents (Indianapolis Star). pizzazz for good measure. Did Borst real- conference committee,” Kiely said. “By ly want tax restructuring, or political keeping the bill in the Senate, they got to SCHOLER VOTED FOR 21ST FUND: After voting advantage? dictate.” That galled Bauer. One lobbyist noted, “You guys (the At the beginning of the final week, continued on page 5 Page 5 of 9 Tuesday, June 25, 2002

Sen. Vi Simpson teamed up with The elected leaders had long Republican Sen. Johnny Nugent in an vowed to prevent an “expansion of gam- attempt for an end-around. "For the first bling.” While the 103 lobbyists seemed to time the finance leaders are talking to muster their resolve, ultimately that pow- each other face to face," said Sen. Greg erful lobby would keep the bill alive. HB Server, R-Evansville (Jennifer Whitson, 1001ss was a Christmas tree bill for the against similar proposals Evansville Courier & Press). "I think the gaming industry -- dockside, French Lick, during the regular and spe- peons putting together a program motivat- pull tabs for the horse tracks and OTBs. It cial legislative sessions, ed them." fractured the Senate Republicans into Rep. Sue Scholer, R-West Simpson feared that a stall was in three camps. Sen. Meeks said the GOP Lafayette, supported the final compromise. "It comes the works, with an ending similar to that was hopelessly divided over cigarette tax, back to what I thought was of March 12-14. "I think they knew we gaming and an income tax hike. For the important, economic devel- had the votes and thought, 'If we don't do “gamers,” it was a very clear vision of, as opment, the 21st Century it, somebody else will,'” she said. economist Bill Styring might put it, Research and Technology By late last Thursday afternoon, “Cadillacs for Christmas, for everyone!” Fund and a spending cap. those fears seemed to be materializing and The business and manufacturing This is not a time you can by late that night, after Simpson and Borst lobby had similar incentives, but the end do lots in taxes. We needed amendments had failed, it looked like a result for them was full of potential to move forward. The bill second special session was looming. In Pandora’s boxes. As HB 1001ss moved was a reasonable step" (Lohrmann, Lafayette pleading for his amendment, Borst said, forward, it was the gaming lobby that Journal & Courier). Scholer “It would be a shame to deepsix this.” seemed to keep breathing life into it at had voted against the bill Minutes after it failed, Borst was points where it could have derailed, at when it moved from the saying, "I think the wheels have already least until Borst’s Heimlich maneuver. By House to the Senate earlier fallen off. I know this is the end of ses- Friday night, the gaming lobby had more this month. Democrat Joe sion. So be it.” incentive to kill it, and after Borst and Micon publicly took her to At 10:40 p.m., Borst and Garton Simpson struck a deal with O’Bannon, task for not supporting the went to see Gov. O’Bannon, where they they seemed resigned to its fate by bill. were expected to discuss an amendment Saturday afternoon. BECKER, LIGGETT, ALDER- that could be offered before a final vote. While the gaming lobby posted MAN SAID NEGATIVES Before he met with O’Bannon, $170 million in profits in May for only OUTWEIGHT POSITIVES: Borst said, “The gamers out in the hall the second time (a 12-percent increase Rep. Vaneta Becker said the have their hands wrapped around the over May 2001), they tried to make the negatives in the bill out- throat of this bill and are choking it. If the case that any industry remaining static weighed any positives governor sits there and allows them to do means doom. The final bill, gently (Whitson, Evansville Courier it, I don't know what's going to happen to tweaked at the behest of lobbyist Joe & Press). "I have said from the state of Indiana." Loftus to keep the higher taxes away from the very beginning, don't raise taxes and cut educa- some of the smaller casinos, was devastat- tion at the same time," Gamers in the Hall ing for Argosy and Hoosier Park at Becker said. She also said Aside from the bad April and Anderson. Centaur’s Kurt Wilson bitterly she opposed the bill May revenue numbers, if anything forced complained of being “demonized” despite because it didn't reinstate Borst and Garton together, and made a the thousands of jobs and the development cuts to domestic violence deal with Gov. O’Bannon palatable, it was of an accompanying agriculture sector. programs and home health the gaming lobby. But attaining dockside in any other setting care for seniors. "It also doesn't fix the bottom line," Early in the special session, Rep. would have been a victory. For a time on Saturday, the snub she said, adding that if the Eric Turner released a three-page docu- bill doesn't generate the of French Lick seemed like a deal breaker, ment outlining the 103 registered gaming revenue it claims it will, leg- lobbyists. It read like the “Who’s Who” of until the second roll of the dice. islators are going to be the Indiana political establishment -- for- forced to raise taxes again mer speakers, legislators, party chairs, Gov. O’Bannon power attorneys and white shoe law firms. At his doorstep on the second continued on page 6 Tuesday, June 25, 2002 Page 6 of 9

floor stood Sens. Borst and Garton at tion showing votes since 1971 that he had 10:40 p.m. last Thursday. “When the made for cutting taxes and even included Borst amendment didn’t pass, and the the Dec. 16, 1982, special session rollcall Simpson/Nugent amendment didn’t pass, when O’Bannon voted against the largest all of a sudden they were at the point tax increase in Hoosier history.” where they didn’t have anything,” His most effective campaign ad next year. "I'm concerned O’Bannon told HPR Monday afternoon. placed him on a Victorian front porch, whether the budget figures “The majority really wanted to do holding a property tax bill vowing to hold are right. If it's not done something, but there was still negotiating the line against increases. At a gubernato- right, we have to do it going back and forth and that was still rial debate at Crown Point, O’Bannon had again," she said. But Rep. being played out. Certainly that’s when I called for welfare and Brian Hasler, D-Evansville, called Becker's reasons thought, I knew, they could pass it school taxes to be "the excuses of the because they were so close to what Sen. removed from property moment." "If people are Borst wanted, going from 100 percent of taxes. He also called truly concerned about the schools off the property tax roles to 60 for a commission, Evansville Psychiatric percent; no income tax; Bauer agreeing on insisting that Indiana Children's Center, they some of the business taxes. was burdened with a should be a yes vote on this “They were that close. That’s why 19th Century tax system. It can’t be done bill," Hasler said. "We could I certainly asked them, particularly with in piecemeal fashion, O’Bannon said. have done a lot better," said Sen. Garton, to go back one more time. I Goldsmith would have been an Rep. Robert Alderman, R- thought they could do something. By 1 activist governor with an array of legisla- Fort Wayne (Kelly, Fort Wayne Journal Gazette). a.m. Friday, “Sen. Garton wasn’t very tion ready to go in January 1997. "So many things seem to sure that anything could be done,” O’Bannon and the Democrats had put benefit the average person O’Bannon said. every man hour available into winning the but there's a price tag on How did O’Bannon respond? “I 1996 campaign. They were not ready for those things." There was said, ‘Let’s try one more time.’” tax restructuring when he took office. also criticism from both Lt. Gov. Joe Kernan said that after By 1998, O’Bannon had selected sides of the aisle that the O’Bannon’s statement, “We made some a huge Blue Ribbon Commission on bill was lopsided in favor of recommendations on where there was Taxes. Commission chairman Kurt Zorn business interests and put common ground. From there, Sen. Borst talked of establishing a “framework” for too much burden on individ- went back to work and drafted an amend- property tax reform. By October of that ual Hoosiers. "I don't want to leave here with some- ment that ultimately passed.” year, with a $2 billion surplus, Republi- thing we know is not O’Bannon’s background is cans were accusing O’Bannon of hiding responsible that punishes instructive of how he operates. He served behind the commission. There was inter- individual taxpayers with only two years in the majority in the nal division within the Democratic Party such a substantial tax Indiana Senate out of 18. By the time he between the “spending wing” and the “tax shift," said Rep. Ron joined Evan Bayh on the ticket in 1988, cut wing.” Liggett, D-Redkey. the “no new taxes” era had emerged. By the time the Indiana General Democrats were burned when 1984 presi- Assembly went into session in 1999, it AYRES, LAWSON, CHENEY dential nominee Walter Mondale told the was Republicans thumbing their noses at VOTE YES, DESPITE ‘BAD nation that he would raise taxes. President restructuring. “The time to do it was two STUFF’: "It's not perfect, there's a lot of bad stuff in George H.W. Bush told the nation to “read years ago in 1997 or two years ahead in it, but considering the (eco- my lips, no new taxes,” and was defeated 2001,” Borst said in the Dec. 11 edition of nomic) situation we're in, it in 1992 when he did. HPR. “The politics of taxation does drive gives Northwest Indiana a When O’Bannon finally ran for policy.” Speaker John Gregg added, “No chance," said Rep. Ralph governor, it was he who was demonized one wants to do a tax shift.” And Sen. Vi Ayres, R-Chesterton (Terry as a “big taxer” by Republican Stephen Simpson added, somewhat prophetically, Burns, Times of Northwest Goldsmith. In the Sept. 11, 1996, edition “It is a legislator’s job to put forward cre- Indiana). Rep. Linda of HPR, it was reported, “O’Bannon ativity. We don’t have to wait for the gov- Lawson, D-Hammond, said showered the press corps with documenta- ernor.” Page 7 of 9 Tuesday, June 25, 2002

The year 2001 presented the “day O’Bannon said. “I have somewhat more and night” division of the O’Bannon support in the Democrat House and we tenure. He had won a 15-percent victory were focused there to make sure we got over David McIntosh in 2000 on a record enough votes out. That was the first chal- of decreased crime, more cops, 300,000 lenge when I talked to all of them in new jobs, his “Taxpayer Protection Plan,” early January. Chairman Bauer took the and, by the way, tax cuts that inspired the lead in December and had seven hearings while she hoped lawmakers bumper sticker, “Thanks a billion.” around the state that helped get people would do more to overhaul Shortly after his 2001 inaugural, focused. Still, it was hard to get focused. taxes and fix the budget, the the bad news began tumbling out of a In January, a lot of legislators didn’t think bill heading to the gover- national recession. O’Bannon’s priorities we needed the budget help. nor's desk is at least a start. were the budget (which he let become O’Bannon said that while the Rep. Duane Cheney, D- law without his signature) $600 million administration “could provide the num- Portage, agreed, saying the final legislative compromise out of balance, and a full-day kinder- bers” (something Borst complained he might not go far enough, but garten plan, which ultimately was killed couldn’t get almost until the end), he felt it addresses some immediate by Bauer. Borst was calling for dealing it was the “legislature’s domain” to forge fiscal problems in the region. with reassessment in 2003. By Sept. 11, the plan. "It's the only way we're 2001, when terror struck the nation, While Bosma complained that going to get revenues to Indiana was reeling with the loss of more O’Bannon didn’t communicate with lead- stave off further cuts in edu- than 100,000 manufacturing jobs, a ership until the very end, the governor cation, Medicaid, prisons decline in personal income, and virtually said he met with 23 House Republicans and parks," he said. "It's the best we could do under the no cogent economic development strate- to try and get a plan passed. “Not only circumstances." gy. did they not want to do anything, they It was in May of 2001 that felt no responsibility to help with these LEGISLATORS LAMENT O’Bannon told Kernan to begin working two problems,” O’Bannon said. “The FRENCH LICK SNUB: Rep. on a tax restructuring plan, which was political focus in Indiana was over spend- Jerry Denbo, D-French Lick, ultimately unveiled on Oct. 18. ing, when we ranked 45th in the country voted against the bill yester- The gubernatorial model the in spending. That’s hard to get past the day, saying it was unfair to Hoosier public policy community was political rhetoric to state what the need is. cut Orange County, which has the state's highest using to gauge O’Bannon was established We finally got there this past week.” unemployment rate, out of by Gov. Otis Bowen, who used his last As for not releasing a new plan the legislation. “The people few years as speaker and the 1972 guber- on May 14 as promised, O’Bannon press who have no money always natorial campaign to make the case for aide Mary Dieter said the administration get left out,” he said his property tax reforms. In 1987, Gov. feared a brand new plan would have been (Stedman, Louisville Courier- Robert D. Orr feverishly worked the “a lightning rod.” The administration Journal). “The people with public for support of his A-Plus educa- knew that going with the Bauer plan that money get what they want.” tion reforms that augmented his legacy. had been panned in the Senate in March DOBIS PREDICTS NO NEW O’Bannon approached tax “was risky, but putting out another plan GAMING LAWS FOR A restructuring not so much as an advocate, would just delay everything.” DECADE: State Rep. Chet but as a facilitator and, ultimately, an Gov. O’Bannon said, “Calling Dobis had rare praise for the arbitrator in a state with a constitutionally them back in a special session was the Republican Senate Finance weak governorship. right thing to do. I think letting them pick Chairman Larry Borst, who “I’d say that’s a good observa- up in negotiations where they left off refused to allow pull-tab slot tion,” O’Bannon told HPR. “We got split instead of starting with a whole new plan; machines for race tracks or a houses here, one Democrat, one our plan would have been a mix of theirs. casino in French Lick. “This Republican.” Bowen and Orr had GOP They were the only ones who could do it session we finally took the process back from the gam- legislatures, and yet barely got their his- in the legislative process.” ing industry,” Dobis said toric initiatives passed. Then there was the threat of a (Steve Walsh, Gary Post- “It’s a tremendous difference,” second special session. “Sen. Garton told continued on page 8 Tuesday, June 25, 2002 Page 8 of 9

me, ‘Frank, I know you’re not kidding on Matthew Whetstone of Brownsburg; and that.’ I told John Gregg I was not kidding David Yount of Columbus, who changed on that, even if it would cost a lot of their votes Saturday night. As soon as friendships, which it would and has. It’s Gregg saw the 51st representative vote still the right thing to do for the state of yes, he closed the machine. Tribune). He predicted the Indiana. They were so close to getting it Rep. Dennie Oxley, D-English, General Assembly would done.” said, “I was hopeful after the first vote not pass another major Progress during Gov. O’Bannon’s that we would have a chance to go back gambling bill for a decade. tenure cannot be truly assessed until the and make some things in this bill better,” end. An activist governor would present Oxley said (Lesley Stedman, Louisville HARRIS, MOSES TO GET great initiatives, twist elbows and detour Courier-Journal). “But after talking with OPPONENTS: While most the asphalt trucks away from recalcitrant my colleagues, I realized that was not Northwest Indiana lawmak- legislator’s districts to get things done. going to happen. This bill is definitely ers will not have opposition O’Bannon is not prone to issuing threats, better than no bill.” Rep. Russ Stilwell in the general election, Republicans are challenging or slapping backs. “People kept saying he didn't like the failure to restore cuts to a House leadership, including was missing in action,” Dieter said. home health care program for the elderly Rep. Earl Harris (Steve “That’s just not true. It’s not his way. He’s and that it represented a greater shift of Walsh, Gary Post-Tribune). a facilitator who works quietly.” the tax burden from businesses to individ- Thursday was the deadline In 2002, as he did in June 1997 uals. The bill passed the House in early for the parties to announce when the House Republicans handed him June with funding for those programs whether they will hold a a special session and he bartered workers restored, but Senate Republicans stripped caucus before June 30 to fill comp increases for new Indianapolis stadi- them out. "I'm disappointed the governor's a vacancy on the November ums, O’Bannon’s most vital 72 hours office didn't broker a better deal in the ballot. Seven local state rep- weren’t at the beginning, but at the end of Senate," Stilwell said (Jennifer Whitson, resentatives and two state senators will not be chal- the process. At his tactical best, it was Evansville Courier & Press). "I think that lenged in the fall. One O’Bannon that pressed for the ultimately first concurrence vote was important," exception is Harris, D-East successful concurrent resolution course. Rep. Scott Pelath, D-Michigan City, said, Chicago, who is also vice “The governor made some right "because the administration had to realize chairman of the House decisions in the last few days,” said Kiely. that we weren't satisfied with everything, Ways and Means “Bauer pretty much put his plan together and he needed to make some improve- Committee. Though Harris in isolation of the governor’s office. The ments, and I think he did that" (Martin has one of the most heavily governor was helpful in the end, the lieu- DeAgostino, South Bend Tribune). Democratic districts in the tenant governor was more helpful to get One influential lobbyist told HPR state, Republicans have more Democrats to pass the thing.” that while the O’Bannon meeting with filed to hold a caucus to appoint a candidate in his “We were adjusting our plan up Borst and Garton was ultimately catalytic, district. Also as part of a until the last week,” O’Bannon explained, “That breakthrough would have been for GOP campaign to target “looking at the best of both plans that had naught had the ISTA not stepped up.” House leadership, the party passed the houses. Chairman Borst and That helped shore up House Democratic filed to hold a caucus in the Chairman Bauer were getting to that votes. “If the ISTA had gone the other seat held by House Ways point, but the biggest challenge was that way, I believe the vote would have gone and Means Committee no one really wanted to do it. Politically, the other way. The bill really isn't good chairman Pat Bauer, D- people wanted to put it off a year.” news for K-12 education. (And it's cer- South Bend. Architect Matt tainly not great for higher ed.) But, the Kelty of Fort Wayne, a for- ISTA concluded that the potential mer aide to U.S. Sen. Dan Nine changed votes Coats, has announced he They were Democratic Reps. Clyde long-term impact of meaningful business will challenge Rep. Win Kersey of Terre Haute; Thomas Krom- tax reform coupled with some infusion of Moses in HD81, The Howey kowski of South Bend; Dennie Oxley of general fund dollars were enough to offset Political Report reported on Milltown; Scott Pelath of Michigan City; the grave funding uncertainties.” Friday. “We think people and Russell Stilwell of Boonville, and Kromkowski and Pelath said see a lack of leadership out Republicans Richard Mangus of Lake- O'Bannon assured them that he would find of (Gov. Frank) O’Bannon ville; Richard McClain of Logansport; a way to restore funding cuts for a popular and the leadership in the Page 9 of 9 Tuesday, June 25, 2002 home health care program, for domestic it is a legislative work product because it violence shelters and for youth service is a little bit of all of us.” bureaus. "Based on that," Kromkowski said between votes, "I can put up a green Joe Kernan light one time." The process began with Lt. Gov. Mangus said he switched his vote Kernan last May, and surfaced on Oct. 18, for other reasons. "It's time to go home," House,” said Luke Messer, widely praised as an unexpectedly credi- executive director of the state he said. "That was the best we were gonna ble plan. Republican Party. Republicans get, there's no use coming back for 40 But Kernan was a puzzling figure have not found a candidate for more days." Rep. Matt Whetstone, R- throughout the first six months of 2002. either race. Around the state, Danville, said, "The first time I voted 'no' Popular with Democratic legislators, it the GOP filed five caucus because no one wants to vote for a tax was O’Bannon that brought about their intents without candidates. increase. But this was a good bill" (Kevin loathing with vetos of a pay increase and Precinct workers from the dis- trict will have until June 30 to Corcoran, Indianapolis Star). mixed signals on plans and budgetary find someone and hold an elec- McClain said, “After that first vote, numbers. Why wasn’t Kernan taking the I walked off the floor and walked to an tion. Indiana Democrats have lead? many asked. The answer is, Kernan called caucuses in four House empty part of the Statehouse” (Dave was loyal second fiddle in a “facilitator” districts and three Senate, said Kitchell, Logansport Pharos-Tribune). “I administration. He wasn’t a free-lancer. Political Director Tim just had to have a talk with myself and try Ultimately, when he gave what was Henderson (HPR). to come up with what I thought would be described as a “win one for the Gipper” the best decision. Losing 100,000 jobs is speech before the Democratic caucus on LANDSKE, CHENEY, MRVAN pretty disastrous. It’s going to take five to Saturday afternoon, Kernan delivered. WILL GO UNOPPOSED: This year seven Northwest Indiana 10 years to get our economic climate “He answered all questions candidly, hon- back. It will take more than what we’ve House members and two state estly, sincerely and straightforward,” senators were effectively re- just done.” Gregg observed. “Many were tough. He elected when the deadline can go into the lions den like Daniel or passed Thursday (Walsh, Gary Celebratory leadership into the fiery furnace like the three.” Post-Tribune). The Democrats Late Friday night, Sen. Garton Kernan told HPR Monday morning, had hoped former Lake County noted lawmakers' willingness to vote for a “The governor weighs the pros and cons tourism director Speros major tax increase in an election year. of individual circumstances. From begin- Batistatos would challenge Republican incumbent Sen. ning to end, he clearly believes the leg- "That's courage, folks. I'm proud of the Sue Landske, R-Cedar Lake. Senate," he said. islative process has to work its way. He “He is still in the middle of a Gregg was unabashed in his admi- stepped in and helped forge the compro- job search. His priority right ration for Senate leadership. “Garton and mise. It’s a monumental piece of legisla- now is feeding his family,” Borst apparently patched things up and tion on the most difficult subject matter Manous said. The Republicans worked together. No kidding, Garton is the General Assembly can deal with. had said two potential candi- tops. He is the most underestimated guy “There were parts of the plan that dates were prepared to run in the place. If I were in a fox hole and got better in my view since Oct. 18 and against incumbent Sen. Frank Mrvan, D-Hammond. His dis- parts of the plan that I don’t think are as could pick only a handful, Bob G. would trict was made more heavily be one of them.” good,” said the presumed 2004 Demo- Republican by redistricting. “A Garton would characterize it as a cratic gubernatorial nominee who had to candidate never emerged,” “third floor success.” Borst said he was endure months of bad economic news and Messer said. In contrast to the “astounded that everything we set out to GOP criticism of his staggered Commerce past two campaigns, do is in that bill” (DeAgostino, South Department. “From beginning of the Republicans did not put up a Bend Tribune). “The first one is a vote process we have said you have to look at candidate against Rep. Duane your feelings. The second is a ‘We go this as the total package. Cheney, D-Portage. “What can I say, I’m happy. I hope it’s a home and don’t have to come back’ “There’s a saying in golf: No room sign that I’m serving my dis- vote.’’ Sen. Simpson called it a “compos- for pictures on the score card. At the end trict,” Cheney said. ite’’ solution. “Although it isn’t a perfect of the day, it’s whether you win or lose. " work product in my definition, I suppose This was a win for everybody.” "