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HPI WEEKLY PUBLISHED EARLY NEXT WEEK: The next weekly edition of Howey Politics Indiana will be published sometime early next week, coinciding with the Democratic veepstakes determination. You will be alerted later today of new content at www.howeypolitics.com on our veepstakes analysis going into this sequence.
FRUSTRATED LOCAL OFFICIALS VENT AT MUSGRAVE: Frustration was the emotion of the day Wednesday as Cheryl Musgrave met with the Michiana Area Council of Governments (Sulok, South Bend Tribune). Musgrave is commissioner of the Indiana Department of Local Government Finance. .jpg)
Her agency frequently gets blamed — fairly or unfairly — for delays and other issues related to local budgets. Area mayors, council members and other local officials vented Wednesday about everything from the way police pensions are funded, to tax-exempt properties, to ideas about consolidating services. Musgrave said she is trying to alleviate some of the tensions by taking steps to help cities and counties. For example, she announced Aug. 1 that the DLGF has extended the deadline for local governmental units to adopt their 2009 budgets and levies. The normal deadline is Sept. 30, but she extended it to Dec. 1. The problem this year, as it was last year, is that most Indiana counties have struggled to gain approval of their tax rates from the DLGF. Counties started to fall behind in submitting the needed data in 2003, Musgrave said, and they have never caught up. Without the tax rates, the counties cannot send out property tax bills, and without the tax payments, the counties have little or no income. Some have had to borrow money to pay salaries and bills. The interest they pay exacerbates their budget woes.
LUECKE ASKS IF TRENDING CAN BE DELAYED: Musgrave said the state should have received ratio studies already for next year’s taxes, but only nine counties have submitted the data, and one of those will be asked to resubmit the work (South Bend Tribune). Ratio studies are part of trending, which is a way of assessing property values. Trending requires assessors to calculate the value of properties every year, based on sales of comparable properties in the same neighborhood. The intent is to calculate the true market value of a property. In past years, reassessments were done every 10 years, not every year. If so many counties are so far behind, asked South Bend Mayor Stephen Luecke, would it be possible to skip trending for one year to let them catch up? Musgrave said local officials need to talk to their state legislators to see if they would agree to such a plan. One reason for the annual assessments, she said, is to avoid the big jumps in property values that could occur after a 10-year gap in assessments. The idea was to provide for small annual increases in property taxes, rather than a big hike every decade. But that hasn’t happened, she admitted. Even with annual assessments, some properties have seen big increases year to year.
COUNTY COUNCILS COMPLAIN: County councils now are responsible for reviewing the budgets of all governmental units in the county except schools. That drew complaints from two of the MACOG members. John Letherman, an Elkhart County Council member and president of the MACOG board, said his council doesn’t have a staff to do that kind of work (South Bend Tribune). Marshall County Council member Ralph Booker agreed. He said the county auditor is already overworked and can’t help. He complained the extra work is one more job the state has given counties without paying for. Furthermore, Letherman complained, the councils will have the responsibility to review the other budgets, but not the authority to change them. Musgrave said it might take a while for local councils to adapt to their new responsibilities and to understand the budgets of other government entities, but she thinks the review process ultimately "is going to be great.” In the meantime, Booker told Musgrave, local governments don’t like the DLGF. One frustration, he said, is the constant changes being made. He asked for a period when local governments will be told "this is the way it’s going to be,” and no changes are made for a while.
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Indiana Governor
DANIELS PROPOSES LOTTERY PRIVATIZATION: Gov. Mitch Daniels on Wednesday unveiled a proposal to make a college education more accessible and affordable for Hoosier high-school graduates, particularly those from middle-income families (Loughlin, Terre Haute Tribune-Star). He will ask the next Indiana General Assembly to approve the Hoosier College Promise, which would be available to high-school graduates whose families earn about $60,000 or less annually. Those students would receive two years of free tuition at Ivy Tech Community College or an equivalent amount of $6,000 in need-based aid to use for their first two years at other colleges or universities in Indiana. Indiana’s student aid programs do a good job in assisting those from low-income families, Daniels said. “We do have a very large gap in the middle — the lower-middle and median income families. The cost of college has outrun affordability in too many cases,” Daniels said during an announcement at Ivy Tech in Terre Haute. It is estimated the plan would cost about $50 million annually, once fully implemented. About 24,000 new high-school graduates (incoming freshmen) would be expected to receive a Hoosier College Promise award each year. He proposed two possible financing options that both involve the Hoosier Lottery. One option would be to privatize the lottery and auction the rights to manage it for 30 years through a lease agreement. Daniels suggested that the private contractor would provide an up-front payment of $1 billion or more, which would be put into a trust for the program. The company also would have to pay the state an annual royalty of $200 million to support current uses of lottery funds, Daniels said. The second option involves the state issuing $1 billion in bonds, with proceeds put in a trust to fund the program. The 30-year bonds would be repaid through future growth in lottery revenue.
BAUER WOULD RATHER BOND: House Speaker B. Patrick Bauer said he likes the governor’s new scholarship plan better than the one offered in 2007, but he remains "opposed to selling the lottery" (Indianapolis Star). "For a private company to make a profit," he said, "more people would have to lose money to the lottery, and that creates all kinds of social effects." Bauer said he would be willing to explore the bonding proposal, noting that was an option he suggested with the Toll Road project. "We have not done very well with the Family and Social Services Administration and Toll Road privatization projects," he said. "With bonding, the state would keep control, therefore the public would keep control."
SO WOULD REP. KERSEY: State Rep. Clyde Kersey, D-Terre Haute, said he likes the concept, which addresses a serious need in the state. It would benefit students “who would probably never have the opportunity to go to college unless a program like this is available,” he said (Terre Haute Tribune-Star). But when it comes to financing the proposal, “The devil is in the details,” Kersey said. “I think it’s going to be very difficult for the governor to get a privatization plan through the Legislature for the lottery — consider what happened with [Family and Social Services Administration] and the Indiana Toll road.” Kersey is more open to the bonding proposal.
ISU PRESIDENT SUPPORTS CONCEPT: Dan Bradley, Indiana State University president, said there are many questions about which students would benefit and how the program would be funded (Terre Haute Tribune-Star). “I think it’s a good concept,” Bradley said. The fact that the Promise award could be used to attend other Indiana colleges and universities “would make it obviously very valuable to Indiana State students as well.”
DANIELS’ TO DISCUSS TEACHER RECRUITMENT: Gov. Mitch Daniels will cap this week’s series of education policy announcements with a news conference at 9 this morning at the University of Indianapolis (Howey Politics Indiana). Daniels is expected to discuss his vision for teacher quality and recruitment initiatives. In attendance will be representatives of the four Indiana universities participating in the Woodrow Wilson Indiana Teaching Fellowships, a groundbreaking new program intended to steer talented college graduates into careers as math and science teachers. Indiana is the pilot state for a national program proposed by the New Jersey-based Woodrow Wilson National Fellowship Foundation, whose president, Arthur Levine, will attend and will be available for interview after the news conference.
SKILLMAN, OXLEY DEBATE: The candidates for lieutenant governor squared off in a debate Wednesday at the Indiana State Fair – a tradition that focused on agriculture and rural Indiana (Kelly, Fort Wayne Journal Gazette). The turnout at the Indiana Farm Bureau building was great, with hundreds sitting and standing around the edges of the room. Indiana’s lieutenant governor has traditionally overseen state efforts on agriculture and rural affairs. Rep. Dennie Oxley, D-English, won the coin toss and delivered his opening statement first, touting his qualifications as well as those of Democratic gubernatorial nominee Jill Long Thompson. “Jill and I firmly believe that every county, every community and every citizen of Indiana matters,” he said. “How long has it been since you felt like you had a seat at the table and a voice in the discussion?” But Republican Lt. Gov. Becky Skillman wasted no time talking about the change she and Gov. Mitch Daniels brought to state government. “Change makes a great sound bite,” she said. “But if you are looking for real, positive meaningful change for Indiana, you don’t need to look any further than Gov. Daniels and myself. In 2004, we said we were people of change and we meant it. In 2004, we said what we would do, and we did it.”
ISSUE OF TAXES: The long-debated issue of property taxes arose as farmers around the state receive bills that reflect an increase in how their land is valued according to an established formula (Fort Wayne Journal Gazette). Skillman said while homeowners were the focus of tax relief this year, part of the plan will remove entire programs from property taxes, which should help all taxpayers. “I’m beginning to talk to a lot of farmers now that statements are going out and they do feel like they are unduly burdened,” she said. “Maybe we can do something.” Oxley mentioned a bill that House Democrats pushed in 2007 to reduce property taxes that included a provision to keep the value of farmland the same. But he said the Republican administration did not support it. He also used that question to point out that Skillman, when she was a legislator, voted for several budgets that helped cause the massive structural deficit in state government that she referenced fixing twice in her remarks. And she noted that before she and Daniels took over, Indiana was only one of a handful of states without a specific agriculture department.
Presidential
McCAIN TRIAL BALOON ON PRO-CHOICE VEEP: John McCain’s admission to the Weekly Standard’s Steve Hayes ("Shayes" to friends) that he would consider the possibility of choosing a pro-choice running mate is rightly seen as a trial balloon to gauge reaction among conservative base voters to such a move (Cillizza, Washington Post). "I think that the pro-life position is one of the important aspects or fundamentals of the Republican Party," McCain told Hayes. "And I also feel that — and I’m not trying to equivocate here — that Americans want us to work together. You know, [former Pennsylvania Governor] Tom Ridge is one of the great leaders and he happens to be pro-choice. And I don’t think that that would necessarily rule Tom Ridge out." Later he added: "I think it’s a fundamental tenet of our party to be pro-life but that does not mean we exclude people from our party that are pro-choice. We just have a — albeit strong — but just it’s a disagreement. And I think Ridge is a great example of that. Far more so than [New York City Mayor Michael] Bloomberg, because Bloomberg is pro-gay rights, pro, you know, a number of other issues." So, what does it mean? The simple fact is that at least two of the candidates McCain is thinking very seriously about picking as his second in command — Ridge and Sen. Joe Lieberman (I-Conn.) — who are publicly in favor of abortion rights. A third potential candidate, former Massachusetts Gov. Mitt Romney, was supportive of abortion rights until a few years ago (although he has now adopted a solidly pro-life position). Among those considered to be McCain’s "Final Four" then, only Minnesota Gov. Tim Pawlenty has a consistent public record of opposing abortion.
OBAMA AD FEATURES HOOSIERS: A new Obama campaign ad airing in Indiana uses comments from Hoosiers and voters in neighboring states to criticize John McCain’s view of the economy (Indianapolis Star). The 30-second spot contrasts positives statements of McCain’s on the economy with views like Lafayette’s Lauren Ahlersmeyer. "I sometimes struggle just to get essentials, you know, the milk, the bread, the eggs," she says in the ad. Kelly Robertson of Elkhart calls the economy "the bleakest of times." Similar comments are made by people from Ohio and Kentucky. The ad starts with a January clip of McCain saying, "I don’t believe we’re headed for a recession." "How can John McCain fix the economy, when he doesn’t think it’s broken?" the ad asks. Indiana GOP spokesman Jay Kenworthy said Obama "has abandoned his pledge to be above politics as usual." "Opening offices in Indiana and running ads here didn’t move his numbers an inch, so he’s going negative," Kenworthy said. "Now Hoosiers should brace for three months of negativity you can believe in." The ad, the fifth for Obama in Indiana, is part of a group of recent ads targeted to a single state.
OBAMA CAMPAIGN HOLDS SENIOR FORUMS: Today, the 73rd anniversary of Social Security, seniors across Indiana will gather over coffee tomorrow to discuss issues ranging from Social Security and pensions to healthcare. It is also an opportunity for local seniors in Bedford, Corydon, Greenfield, Marion, Michigan City, Muncie, Shelbyville, and Valparaiso to learn more about Barack Obama’s plan to “Strengthen Retirement Security.” In addition to the coffees in these communities, the Obama campaign’s National Policy Advisor Dean Baker will lead roundtable discussions tomorrow in Terre Haute, Vincennes and Evansville on Barack Obama’s plan to “Strengthen Retirement Security.” (Howey Politics Indiana)
Congress
VISCLOSKY TOURS TORNADO DAMAGE: A host of town leaders shepherded U.S. Rep. Pete Visclosky through a ravaged Ridge Road neighborhood Wednesday, pointing out the destruction from last week’s tornado (Times of Northwest Indiana). Visclosky, D-Ind., described the scene as "terrifying." "I’m amazed at the physical destruction," he said. Visclosky said he expects a letter signed by Congress in support of Gov. Mitch Daniels’ request for a disaster declaration to be delivered to President Bush as soon as today. If signed, he will push for implementation "as soon as possible," though many days or weeks may pass before there can be any actual relief, he said.
DONNELLY TAKES ON IP THEFT: Tim Demarais knows all about intellectual property theft, and so does his wife (Ronco, South Bend Tribune). In 2002, Demarais, the vice president for international sales and marketing at South Bend-based ABRO Industries, was at a trade show in China when he discovered an ABRO booth. The problem? It wasn’t run by anyone from ABRO. Someone had set up a booth and was writing orders for ABRO products without the company’s knowledge or consent. And among the products displayed were packages of epoxy bearing the ABRO logo and, coincidentally, a picture of Demarais’ wife, Katy, who posed as a model for the original packages. When Chinese officials didn’t belIeve Demarais’ claims of trademark infringement, he pulled a picture of Katy out of his wallet to convince them. "At that time, they brought all these guys down to the show officials, and they interrogated them, and they literally closed down their booth," Demarais said. Fighting that kind of counterfeiting is a full-time job for companies like ABRO, company President Peter Baranay said. He means that literally. In March, ABRO hired a full-time intellectual property attorney. Now, U.S. Rep. Joe Donnelly and some of his congressional colleagues are asking the Bush administration to crack down on intellectual property theft. Donnelly, D-Granger, sent a letter to the White House on Wednesday citing a Government Accountability Office report that showed theft cases falling through the cracks, and urging Bush to support a bill, H.R. 3578, he says will close the enforcement gaps. The bill would establish a network of government agencies — including the U.S. Department of Justice — and empower them with the ability to share information and coordinate civil and criminal actions against people charged with trademark infringement and product piracy.
CAMPO TALKS ABOUT EDUCATION: 7TH CD Gabrielle Campo announced her stance on education today, promoting school choice and increased parental involvement needed for the full development of students (Howey Politics Indiana). Many children are heading back to school today. The year ahead holds many exciting discoveries for our youth; learning their ABC’s, understanding fractions, and studying History. However, within this excitement, a silent epidemic lurks; over 2,000 of these children will drop out of school in Marion County alone. This is just one statistic indicating a flaw in our educational process. "Many solutions have been presented to reform education; they have included changes to policies or shifts in resources." These attempts, while good in nature, have not succeeded," says campo. "In my experience", Campo states, "parental involvement is the missing piece. I strongly believe education needs collaboration between parents, schools, non-profits, and businesses. To foster this partnership, I will work towards an Educational Federal Tax Credit. The Federal Tax credit would be given to an individual and corporation who contribute to the tuition cost of any elementary or secondary student. It would promote parental choice and access to educational opportunities.
Indiana General Assembly
SULLIVAN CALLS FOR MORTGAGE REFORM: Mary Ann Sullivan, the Democratic candidate in HD97, today announced her plan to stem the tide of mortgage foreclosures that has forced thousands of Hoosier families from their homes and driven property values down (Howey Politics Indiana). For the past decade, Indiana has ranked above the national average in mortgage foreclosures. A recent study by the Center for Responsible Lending projected that more than 48,000 Indiana homes will be foreclosed this year. "Hard-working families are struggling to keep up with their mortgage payments as they also cope with the rising costs of fuel and food," Sullivan said. "We have to take action to ease the pain of a crisis that’s putting people out on the streets, devastating our neighborhoods and endangering children." Sullivan’s solution includes three proposals aimed at preventing lenders from preying on uninformed consumers and making assistance more readily available to those homeowners who find themselves in the foreclosure process: Ban pre-payment penalties. Borrowers should not be penalized for repaying a loan before it comes due, especially when it comes to sub-prime lending. We should make it easier for people to refinance or pay down their debts when they are able. Require lenders to include taxes and insurance up front and to review every borrower’s ability to repay a loan. Requiring lenders to review whether borrowers will be able to repay their loans and making sure taxes and insurance are included in mortgage payments will prevent Hoosiers from getting into loans they cannot afford. At least 10 states currently require lenders to assess a borrower’s ability to repay the loan. Consolidate current state programs designed to prevent mortgage foreclosure The state’s mortgage foreclosure prevention programs should be combined with efforts to combat mortgage fraud and predatory lending to create a one-stop resource for struggling families and those who are targeted by illegal and unfair practices. "As I walk through the neighborhoods of House District 97 every night, I see streets lined with boarded-up homes, once well-maintained yards full of trash and weeds, and the burned-out remains of vacant properties. These abandoned houses attract gangs, criminals and illegal dumping. We must do more to stabilize and rebuild neighborhoods that continue to be devastated by this epidemic," Sullivan said. "I believe my proposal will help prevent future losses and provide immediate assistance to those who need help now."
Economy
TUNDRA PRODUCTION WON’T RETURN TO PRINCETON: Toyota’s Princeton plant will not resume producing the Tundra pick-up truck in November, contrary to its plans announced last month (Evansville Courier & Press). Kelly Dillon, a company spokeswoman, said Toyota will concentrate its production of the Tundra in San Antonio immediately. Last month, the Japanese company had said the Tundra line would be moved to the Texas plant in early 2009. Dillon said Toyota is still considering how to best bring about the restructuring of its North American operations, a plan the company announced in July. Dillon said Princeton employees learned of the change in plans Tuesday. Instead of returning to making the Tundra, employees will get an early start at learning to make the Highlander SUV, which will begin rolling off Princeton assembly lines in fall 2009. The plant will be able to make 120,000 Highlanders a year.
LARGEST ETHANOL PLANT IN THE WORKS: A South Dakota-based company that operates ethanol plants in seven states is in negotiations to build its largest facility yet in Warren County (Lafayette Journal & Courier). The Warren County Board of Zoning Appeals voted Tuesday to grant a special exception to landowners north of West Lebanon, helping clear the way for a proposed $260 million ethanol plant to be built by Poet LLC. The 115 million-gallon-per-year facility "would be our largest so far," said Bob Berens, Poet director of site development.
Cities
EAST CHICAGO LOSES 6 FIREFIGHTERS: The city will likely be short six firefighters for the foreseeable future (Times of Northwest Indiana). New recruits to replace those who retired last year have passed their tests and been approved for work by the state Public Employee Retirement Fund. But the Board of Public Works and Safety on Wednesday declined a request from Fire Chief Val Gomez to fill the empty positions, citing a lack of money. "With the financial situation the city’s in right now, we’re not in a position to hire anyone," said City Controller Charles Pacurar, safety board president. East Chicago stands to lose $18 million of its $55 million annual budget through legislation passed by the Indiana General Assembly in March that limits property taxes on homes and commercial facilities beginning next year. The city trimmed its payroll 8 percent in June by eliminating 75 positions through layoffs and early-retirement incentives, with a second round of staff reduction expected in the fall. Pacurar said the firefighters will remain on hold, "until we find some way out of this financial dilemma."
EVANSVILLE FIRE SERVICES QUESTIONED: The Evansville Fire Department’s record for maintaining vehicles came under close scrutiny at Wednesday’s budget hearing by several City Council members who said they have heard complaints from firefighters about lags in repairs and faulty part replacements (Evansville Courier & Press). Fire Chief Ken Zuber admitted there have been problems, but said his department has increased the frequency of vehicle inspections and created an electronic filing system for maintenance requests so they can be more closely monitored. Councilmen Curt John, Steve Melcher and Jeff Kniese each said they have received complaints from firefighters about delays in vehicle repairs and a lack of funding for replacement parts. "I’ve even been told that we’re buying cheaper tires that aren’t even sized for the truck," said Melcher, D-3rd Ward.
INDIANAPOLIS PARKS CHIEF RESIGNS: Indianapolis Department of Parks and Recreation Director Joe Wynns announced his resignation after three decades on the job Wednesday and said his decision was not forced or prompted by proposed cuts to his budget (Indianapolis Star). Wynns will work his last day Sept. 12. "I just decided it was time for me to move on and maybe do something on a national level," Wynns said. "My departure doesn’t have anything to do with the mayor or my position on the budget."
SVILLE POLICE CHIEF FIRED: The Town Council has removed David Dowling from his position as police chief (Times of Northwest Indiana). The vote, made at the end of Wednesday’s Town Council meeting, came as a shock to department leaders, including Dowling, who was visibly angry. After reading a two-page statement, Town Council President Hal Slager requested Dowling be removed as chief. Fellow Republican Councilman Perry Ferrini made the motion, and Republican Councilman Jerry Tippy seconded the motion. Dowling has served as chairman of the St. John/St. John Township Democratic Precinct Organization the last four or five years. His post with the organization caused controversy between party lines. When talk of his removal first surfaced, the Democratic councilmen argued that it was because of his party affiliation.
NEW ALBANY SMOKE BAN PASSES FIRST HURDLE: Protesters of a smoking ban for New Albany met at the 40 & 8 Voiture 1250 Society building Tuesday, bolstering efforts to see language in a recently passed ordinance softened, if not eliminated. (News & Tribune) The ordinance was approved by the City Council with a 5-4 vote on first reading, and if OK’d next week, would outlaw smoking in all public venues and private clubs including the 40 & 8, which is located at 221 Albany St. “It’s really about our freedoms,” said 40 & 8 member and business owner George Waldrews. “I think we’re old enough to have the right to choose.”
Counties
LAKE COUNCIL OKS CHOPPER PURCHASE: The Lake County Council gave Sheriff Rogelio "Roy" Dominguez permission Wednesday to buy a new $2.2 million helicopter on the strength of his promise to cut deeply into the rest of his budget (Times of Northwest Indiana). The county will buy an EC120 manufactured by American Eurocopter, of Grant Prairie, Texas, through a seven-year lease-purchase plan. The helicopter is to be purchased with non-tax dollars including casino funds, fees collected by the sheriff in mortgage foreclosures, federal grant money and the sale of existing helicopters. The council voted 5-2 to commit the county to upgrading Dominguez’s helicopter fleet in the face of an austerity budget that likely will result in layoffs and service cuts to make up an expected $15 million shortfall in property taxes. "Obviously, this couldn’t have come at a worse time," said Councilman Tom O’Donnell, D-Dyer.
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