Statehouse Update

Fiscal/Budget Update

While there has not been an official opening of the budget in the 1998 General Assembly, several bills that have spending implications are beginning to receive action as the session's four-week mark approaches and the March 14 adjournment deadline inches closer.

Statehouse-watchers suggest this signals a softening of the "no budget" position. However, it is still too early to know how each house will deal with the bills moving out of the house of origin.

Purdue continues to stress with lawmakers the five initiatives summarized in the last issue of Statehouse Update : namely, increased funding for innovative technology, the Cooperative Extension Service, the Technical Assistance Program, the new business incubator in the Purdue Research Park and laboratory renovations on the West Lafayette campus.

The December 1997 revenue forecast increased earlier revenue projections for the current fiscal year by $168 million. Based on revenue collections through December, actual collections had exceeded expectations by $58 million. If collections continue at this pace through June 30, actual collections will exceed the December forecast by $130 million. This is, of course, good news for all, and perhaps further ammunition for those of us who would like to see some consideration given to fiscal issues this session.

Tax Cut Proposals to Date

• The House of Representatives has passed to the Senate the House Democrats' rebate proposal of $200 to couples filing jointly and $100 for individual returns. It also includes a provision for the state to pay for up to $50 for textbooks and materials for all public school children for 1998-99 and 1999-2000.

• The Senate passed out of the Finance Committee a bill that would eliminate all property taxes from local school general-fund budgets beginning in 2000. While the bill does not specifically spell this out, it is assumed that the $1.3 billion in tax cuts or lost revenue would be made up from state revenue, which would require an increase in state taxes. It would, however, result in a 29 percent cut in local property taxes.

• A provision to eliminate the requirement to add back property taxes deducted from income in calculating federal taxes, when calculating state income tax liability. It has been passed out of Senate Finance.

• The Senate Education Committee approved a bill to provide an income tax credit for school expenses for students in public or private schools. The credits are for up to $1,000 per child or $2,000 per family for families with incomes below $35,000, or $500 per child or $1,000 per family for families with incomes above $35,000. Senate Finance approved the bill with a nine-to-six vote along party lines. The bill now is ready to be amended and voted on by the full Senate.

In addition to these major tax bills, several other bills address topics such as education tax credits and rebates, homestead credits, and state income taxes, along with bills that address property taxes in other ways. Also, several resolutions designed to start the process for a constitutional amendment to provide for the elimination of property taxes or for a classification of property for taxation have been filed.

All these initiatives to date suggest that legislators want to be able to go home and trumpet their support for cutting taxes in some way. Of course, it remains to be seen if compromises are possible with so little time in the 1998 short session and with a governor who would just as soon delay action until his Citizens Commission on Taxes provides its recommendation next December.

Bills of Interest to Higher Education

A number of bills now circulating in the Legislature focus on various issues of interest to Purdue and other Indiana higher education institutions. Here's a summary of selected bills, their author and current status:

• Senate Bill 378 -- Mike Gery (D-West Lafayette): This bill directs universities to disregard savings in a state savings program from the calculation of awards for need-based financial assistance. Assigned to the Senate Education Committee. No action to date.

• House Bill 1217 -- Sheila Klinker (D-Lafayette): Requires all persons representing themselves as sports agents in Indiana to obtain a permit from the secretary of state. It requires they meet specified requirements and post a bond; provides that acting as an agent without a permit is a Class A misdemeanor; requires a written contract and notification of the student's institution. Assigned to the Economic Growth and Regulatory Relief Committee. No action to date.

• House Bill 1235 -- Brian Hasler (D-Evansville): Requires that all children who have not completed the first grade before July 1, 1999, be immunized against hepatitis B, and requires schools to add hepatitis B to the student's immunization report. It also requires all residential higher education campuses to deny matriculation unless the student provides documentation of immunization. Referred to the Ways and Means Committee. Reported out "do-pass" (shorthand for a "yes" vote from the committee recommending that the full chamber vote "yes"). We anticipates this bill being amended to reduce the requirements on higher education.

• House Bill 1244 -- William Cochran (D-New Albany): Establishes two spinal cord/head injury research centers, one at Purdue West Lafayette and the other at the Indiana University Medical Center in Indianapolis. No funding is provided. Referred to Ways and Means. Reported out do-pass.

• House Bill 1304 -- Claire Leuck (D-Fowler): Permits a deduction for adjusted gross income for contributions from an IRA to institutions of higher education in calculating Indiana income taxes. Referred to Ways and Means. No action to date.

• House Bill 1357 -- Larry Buell (R-Indianapolis): Authorizes higher education institutions to utilize both variable rate and temporary financing as an alternative to long-term bonds for major construction projects. Referred to Ways and Means. Reported out do-pass.

Lunch Break

Wednesday, January 28, marked the annual legislative luncheon for CARET, the Purdue-affiliated Council for Agricultural Research, Extension and Teaching. There was a great turnout as usual, with about 60 legislators, and some 300 CARET members and Purdue faculty and staff, all focusing on issues of interest to Purdue and its mission to Indiana agriculture. Our thanks to those who were on hand.

Legislative Reception

The second annual Purdue-IU legislative reception will be held on Wednesday, February 11, in Indianapolis. Please note the change of location to the Chancellor Room of Embassy Suites, 110 West Washington Street .

The reception is set for 5 to 7 p.m. We encourage all Purdue advocates who can to attend. We would recommend a contact with your representative and/or senator and arrange to meet them there or to pick them up and bring him or her. To help us plan accordingly, please RSVP if you plan to attend by calling (765) 494-6838 or e-mail jmmusser@vpsr.purdue.edu

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