INDIANAPOLIS – Last December I was on a panel with Democrat State Rep. Greg Porter and Republican Sen. Jim Merritt and made this prediction: The Indiana we see today and the one we find next spring will be very different places.

To some degree, I was right. The jobless rate is about 5 percent higher, standing at 10.6 percent as the Indiana General Assembly concluded its special session Tuesday with a $27.8 billion biennial budget. The day before, the “new” Chrysler reopened its four plants in Kokomo. General Motors is still in bankruptcy. The Indiana Treasurer – Richard Mourdock – is still scheming for ways to shut them down and throw about 50,000 more Hoosiers out of work in one of the kookiest chapters in our long auto history.

But this special legislative session opened up another struggle: public education. What emerged was a cultural war that will be played out in the classroom; the playground; the city.

Gov. Daniels with a young Hoosier in Tipton in 2007. (HPI Photo by Brian A. Howey)

“I believe that the other side has a position on public education they have not articulated,” said State Rep. Ed DeLaney of Gov. Mitch Daniels and Republicans. “I think there is a direct assault on public education and they won’t say it.”

“Where does this concept go?” DeLaney, D-Indianapolis, asked. “This came in late and it came from one party. We need to have common schools. We must say no to the lingering death of Indianapolis Public Schools. What size should it be? We budgeted less for 2,000 less students.”

Gov. Daniels did nothing on Wednesday to refute DeLaney’s notion. “If this is an end to public education as we know it, I say thank goodness. We need to end it as we know it and move on,” he said.

Sen. John Broden, D-South Bend, said, “Looking at the bigger picture, you cannot escape talk of K-12 education. It’s roughly half our budget.” He said that Indianapolis schools will lose $28 million, even though the state spends $11,000 per student, Gary $13 million, East Chicago will lose $3.5 million, Anderson $4.3 million. He said that many of the schools would face huge additional circuit-breaker losses due to the 1-2-3 property tax caps. The funding loss comes five years before the 2014 balloon payment is due for No Child Left Behind, which seeks to have every student in the U.S. proficient. In many other districts, the spending is as low as $5,000 per student.

The struggling urban schools will now have vastly less resources to bring their woeful graduation rates up to speed.

“They will go to communities already facing school funding formula losses,” Broden said. “Where is the tipping point? Do we expect these school corporations to compete with charter schools? Compete with neighboring schools?”

State Sen. Lonnie Randolph of East Chicago noted that Carmel-Clay would receive $2.9 million more, and Zionsville $2.7 million. East Chicago is facing teacher layoffs and program cuts.

State Sen. Tim Lanane, D-Anderson, sees a city where its schools and City Hall will be running on fumes. Anderson schools will lose $4.7 million in one year and $4.9 million the next. “When you do look at the impact on the caps, it’s not just on the schools, but cities and towns,” Lanane said. “Muncie had to lay off 40 firefighters. I’m very concerned about what we’re doing to our cities and urban areas. We don’t want our cities to survive; we want them to shine. Remember that phrase, ‘The Shining City on the hill?’ I worry that we’re sending the message that we’re giving up on our cities.”

Rep. Porter explained, “The bottom line is this proposed legislation in my eyes is toxic to public education.” And State Rep. John Bartlett added, “No one has explained to me how we can justify giving $750 million to grown men to play a boy’s game at Lucas Oil Stadium and Conseco Fieldhouse and yet we can’t fund education.”

Republicans eagerly defended the budget. State Sen. Gary Dillon, R-Columbia City, noted that, for instance, IPS had been looking at a $1,100 per student increase. Instead, it was $400. “I don’t know what the right balance is, but we hit it on the middle.”

State Sen. Brandt Hershman, R-Wheatfield, acknowledged, “it’s not equal. Your challenges are not unique and they are not alone.”

And the architect of the budget – Senate Appropriations Chairman Luke Kenley – noted that during budget deliberations, the circuit-breaker was “never brought up.” He said that people were “leaving meetings because they were mad” over how the pie was being sliced.

Senate Minority Leader Vi Simpson said it was necessary to “get beyond this kind of warfare every two years” and urged the General Assembly to take a comprehensive look at how education is funded, adding that it doesn’t necessarily mean the same dollar amount for each student. Kenley and Bauer agreed.

And then there’s Superintendent of Public Instruction Tony Bennett, who said in Merrillville that 35 states cut education funding, while Indiana will see a 1.1 percent increase next year, even though many urban and rural districts will see cuts. “The money should follow the students,” he said.

Bennett mentioned that the most promising changes in state education are coming in Louisiana, where its system was almost destroyed by Hurricane Katrina in 2005.

So, is that what Indiana should be doing, blowing up public education as we know it? Create a modern system instead of the layers and layers that evolved into what we have now that generates an anemic graduation rate in the low 70th percentile?

That’s a profound question that every Hoosier should ponder over the next six months.

The columnist publishes at www.howeypolitics.com

GOVERNOR TO PUSH LOCAL REFORMS: Gov. Daniels said he will renew efforts to enact local government reform in the 2010 legislative session (Howey Politics Indiana). “I hope we make more forward progress next year.  We should never ever skip an opportunity or a session, short or long, to try and make positive change, and we’ll be thinking about that starting right away,” said Daniels.

END OF PUBLIC EDUCATION? GOOD SAYS GOVERNOR: Answering critics in the General Assembly who say the budget, which ends caps for virtual charter schools, hurts urban and rural schools with declining enrollments, Daniels said only bureaucrats will feel pain (Cafferini, Post-Tribune). “If this is an end to public education as we know it, I say thank goodness. We need to end it as we know it and move on,” Daniels said. He said he talked to U.S. Secretary of Education Arne Duncan, who congratulated Indiana on ending the cap. Daniels said this action makes Indiana eligible for education grant funds.

OXLEY FACES IMPERSONATION CHARGES: A former state legislator and recent candidate for lieutenant governor faced misdemeanor charges Wednesday in an incident in which he is accused of pretending to be an active lawmaker to avoid a public-intoxication arrest (Indianapolis Star). The incident involving Dennie Oxley II at a Downtown Indianapolis gas station last week quickly attracted attention, and Marion County Prosecutor Carl Brizzi opted to seek criminal penalties. Police searched Oxley’s wallet and found an old ID card identifying him as a state representative, the affidavit says, and Oxley claimed to be serving in the General Assembly’s special session. Officers released Oxley to a friend, court documents say, because the Indiana Constitution offers legislators limited immunity from arrest during a General Assembly session. Marion Superior Court documents that leveled charges of impersonation of a public servant and public intoxication against Oxley gave no details about his relationship with the woman. She was a former intern for Indiana House Democrats and was working behind the scenes during the special legislative session, which ended Tuesday. The woman’s uncle, Rep. David Niezgodski, D-South Bend, said she had been staying at his condo, across Ohio Street from the gas station. Prosecutors don’t expect to charge her. She was taken to a hospital because of her condition, Brizzi said. “Mr. Oxley was the one who betrayed her trust,” Brizzi said. John Schorg, a spokesman for the House Democrats, said Oxley had worked as a senior policy adviser to House Speaker B. Patrick Bauer, D-South Bend, during the regular session, but his contract ended in April. A conviction on the impersonation charge carries up to a year in jail, and the maximum for intoxication is six months — but Brizzi said Oxley’s penalties likely will fall shorter. “I’m not here to pile on,” Brizzi said. “He’s endured far more publicly than the criminal justice system can bring for these charges.”

OXLEY TURNS HIMSELF IN AFTER WARRANT ISSUED: Former State Rep. Dennie Oxley II turned himself in to authorities at the City-County Building Thursday morning, hours after a warrant was issued for his arrest (WRTV). 6News was at the Arrestee Processing Center through the night, where Oxley was supposed to surrender on charges of public intoxication and impersonating a public official, 6News’ Jennifer Carmack reported. Oxley repeatedly said “no comment” when asked to talk about the charges against him. Indianapolis police said Oxley told officers last Friday that he was immune from arrest because he is a lawmaker and the Legislature is in session. Oxley was supposed to turn himself in at 1 p.m. Wednesday. An arrest warrant had been issued Wednesday evening when that didn’t happen. Brizzi spokesman Mario Massillamany said the prosecutor’s office asked the Indianapolis Metropolitan Police Department to find Oxley and arrest him. Attempts to reach Oxley and his Indianapolis attorney, Rick Kammen, were not successful this week. His father, also named Dennie Oxley and now serving in his son’s former House seat, declined to comment at the Statehouse.

JOBLESS RATE AT 9.5%: The U.S. government announced that the jobless rate remained steady at 9.5 percent (MSNBC). Claims dropped 53,000 to 6.7 million from May, but jobless claims rose by 467,000, according to the Washington Post. “The labor market is not showing signs that it’s turning around yet,” said MSNBC analyst Mark Haines. The average hourly work week declined and earnings were flat. “This is a bad number and it means this recession is enduring,” said MSNBC analyst Pat Buchanan. “This is a Bush-Cheney recession but by 2010 it’s going to be President Obama’s economy.”

INDIANAPOLIS – After a long and partisan special session, the House passed a biennial budget hours before the state government would have been forced to shut down. It came as five states - California, Arizona, North Carolina, Mississippi and Pennsylvania - failed to pass budgets.

The document that House Speaker Pat Bauer, D-South Bend, called a “Republican-flavored” budget  earned a surplus of votes from the Democratic side of the aisle. Rep. Sheila Klinker, D-Lafayette, said there were enough positives in the budget to get her vote.

“I think it was time to move ahead. Any problems that we had in this budget, which were numerous, we’ll work on this summer,” Klinker said. “We have four months until the next budget is discussed, so any corrections we have to make we’ll be making, hopefully in next year’s budget.”

INDIANAPOLIS - This was a cultural war that played out in the Indiana General Assembly’s special session. The battleground was the classroom; the playground; the city.

“I believe that the other side has a position on public education they have not articulated,” said State Rep. Ed DeLaney of Gov. Mitch Daniels and Republicans. “I think there is a direct assault on public education and they won’t say it.”

“Where does this concept go?” DeLaney asked. “This came in late and it came from one party. We need to have common schools. We must say no to the lingering death of IPS. What size should it be? We budgeted less for 2,000 less students.”

“What’s the cost going to be to us later?” asked State Sen. Charles Taylor. “I predict we will be answering those questions in 2011.”

INDIANAPOLIS - It’s a long, looooong way off - the 2012 gubernatorial race - but already there is at least one potential candidate who is facing a moment of truth.

Evansville Mayor Jonathan Weinzapfel went along with a secretive plan to kill Vanderburgh County’s homestead tax exemption. As a result the Indiana Office of Management and Budget told the Evansville Courier & Press that Vanderburgh property taxes billed to homeowners are up 39 percent in 2009, while overall Indiana homeowner taxes are down an average of 7 percent.

The keywords in this sequence are “secret” and “property tax increase.” So Weinzapfel is facing a problem squared: he helped kill the homestead exemption in order to preserve his city’s revenue, and that means he sparked a 39 percent tax increase.

SOUTH BEND - “Cash for clunkers” legislation, passed with bipartisan support in Congress, aims at helping the struggling U.S. auto industry, spurring the economy, improving the environment and reducing reliance on foreign oil.

Worthy goals. No panacea. But certain to help some, especially in Indiana and Michigan, states so reliant on automotive-related jobs.

Too bad it can’t get rid of a Hoosier politician who is a real clunker, willing to hurt his own constituents and use their own money to do it. More on him later.

BALLARD DISAPPOINTED IN CIB DEAL: State lawmakers passed a plan Tuesday to bail out the Capital Improvement Board, though Mayor Greg Ballard’s administration said the mix of tax increases and loans will not be enough to overcome a projected $47 million deficit (Indianapolis Star). Adoption of the plan came after much debate over how best to rescue the CIB, highlighted by a rift that developed late in the game between Ballard’s administration and Gov. Mitch Daniels over how much the troubled sports board could cut in spending. The board operates the city’s stadiums and arenas. The plan, part of the state budget approved in special legislative session, also generated animosity from lawmakers who wanted help for struggling projects in their own communities. In the end, the legislature approved a plan that gives Ballard just one of the three tax increases he requested and forces the CIB to cut a total of $22 million in spending — instead of the $12 million the mayor had suggested was the most possible. The CIB already has cut $10 million. Daniels had proposed it shed $13 million more. “It’s problematic. It’s disappointing, and frankly, the state’s the loser. It’s the state sales tax revenue really at stake,” Ballard told WRTV. “I was very clear we need to get over this three or four-year hump. Then, we could re-look at it. If we can’t do it with what they are making available to us, we are going to have to make some serious decisions.” Ballard admitted that he doesn’t have a Plan B, and said the city will be forced to work with what it has.

The Indiana Senate joined the House by passing the biennial budget on a 34-16 vote shortly before 7 p.m. Tuesday. Earlier in the day, the House passed budget by a 62-37 vote.

The bill Daniels signed - his third budget - is a $27.8 billion budget that gives schools an increase of 1.1 percent in 2010 and 0.3 percent in 2011. It keeps $1 billion in reserves.

Daniels reacted by saying, “Like any compromise, this budget has its defects, but it meets the fundamental condition I laid down in January and every day since: to limit total spending enough to preserve our surplus and thereby protect taxpayers against the tax increases happening in virtually every other state.”

House Speaker B. Patrick Bauer explained, ““For better or worse, we have a budget agreement that will keep state government open. This is not the budget that House Democrats wanted. We came into this session pledging to protect our schools and provide more jobs for Hoosiers at a time when more than 336,000 are out of work. We have succeeded only partially in reaching those goals. Considering the problems we faced in negotiations, it is a blessing that we were able to get any movement at all. It is difficult to get movement when you are dealing with people who have set their positions in concrete from the start. That is the problem we faced with the Senate Republicans and the governor.”

Bauer said that Democrats “managed to get an additional $54 million in state support for our public schools and another $100 million for higher education. The governor and the Senate Republicans agreed to our proposal that will guarantee more increases in state support for K-12 if the economy improves and state revenues begin to recover.

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