Proposals may decrease deficit
By Matt Poston
City Editor
The problem is a projected $1 billion deficit in
the state's budget. The solution is to eradicate the possibility of
such a deficit from devastating the state's funding.
But the path from problem to solution is unclear,
as state lawmakers try to decipher the budget's shortcomings.
Unlike the federal government, the state of Indiana
is unable to borrow money in order to make up for budget shortfalls
because the state's constitution prohibits lawmakers from doing so.
That means that at the current rate, it is projected that the state
of Indiana would literally go bankrupt sometime during the summer of
2003.
And though Gov. Frank O'Bannon has made it clear
that he would want to do otherwise at all costs, several cuts in education
may be necessary to keep the state budget from plummeting into bankruptcy.
But in order to keep the education budget intact,
it means getting legislators to agree on budget cuts in other areas
and/or raising certain taxes.
According to Rep. Sue Scholer, R-26th, there are
several options for repairing the current budget crisis, but she says
she is wary of imposing new taxes on Hoosiers.
"We have to search through every nook and cranny
for the money," Scholer said. "Before we ask for taxes in these uncertain
times, our responsibility is to make (taxes) the last resort," she said.
Tax restructuring
One of the numerous new or revised taxes that have
been proposed is a tax that shifts the state's tax revenue burden from
property taxes to sales and income taxes. According to Scholer, this
plan would increase the state's sales tax by one cent and eliminate
the property tax deduction from income tax filings.
Gaming tax and dockside gambling
Another issue before the legislature is that of
dockside gambling. Riverboat casinos are not allowed to stay docked
while gambling occurs on board. Allowing the riverboats to stay docked
could, however, increase the number of gamblers who use the casinos,
which would increase the tax revenue. Rep. Sheila Klinker, D-27th, said
that because surrounding states have dockside gambling, Indiana is losing
tax revenue to states like Illinois. Though O'Bannon has said on numerous
occasions that he would not support an expansion of gambling, he did
include a $2 increase in admissions tax in his proposal to balance the
budget. The tax is based up on how many people enter the casino, and
usually paid by the casinos.
Cigarette tax
A third tax that has been proposed this legislative
session is increasing the state's tax on cigarettes by 50 cents per
pack. Klinker said that the legislature has had a lot of positive feedback
from constituents on the issue. Klinker also said that there have been
many reports finding that the extra 50 cents per pack will help decrease
cigarette sales among Hoosier youth.
Gasoline tax
Gasoline prices might also rise after the end of
this session of the legislature. The proposal, which has been supported
by Scholer in recent years, would increase the state's gasoline tax
by 10 cents per gallon over the next three years. The money would help
fund local road resurfacing and transportation infrastructure within
the state. Klinker said some of the money might help fund the Hoosier
Heartland Corridor, a project with the aim of building a highway between
Lafayette and Fort Wayne, connecting I-65 and I-69.
According to Democrats, some, if not all of these
proposals might have to be passed in order to spare the education budget
from cuts.
"(O'Bannon's) cut everywhere else in the budget,"
Klinker said. "There's no where left to cut, but (cutting education)
is the last thing the Governor wants to do," she said.
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