Speech calls for cuts in budget

Governor's State of State address describes fiscal crisis, need for progress.

In his live State of the State address, Gov. Frank O'Bannon warned legislators that Indiana could slip backwards if they do not accept his balanced budget plan, which makes cuts throughout Indiana's budget, including education.

The plan, which O'Bannon said throughout the speech was needed, could leave Ball State $17 million short in state funding, about 13 percent of the university's total budget.

"Our mission, this session, is to do the things that must be done to build a better Indiana for our citizens," he said in his 30-minute address. "We cannot slow down. We cannot stop. We cannot wait."

O'Bannon said without the "painful" cuts, totaling about $700 million in the next 18 months, the state will not recuperate an unexpected shortage of about $3 billion from projected revenue. This, O'Bannon said, would hurt the state more than the cuts.

Along with the cuts, O'Bannon also asked for an increase in cigarette taxes of 50 cents a pack and increases in gambling taxes.

"In a choice between higher taxes and our schools, I will choose our children every time," he said.

Not everyone accepts O'Bannon's options, though. According to the Associated Press, republicans in both chambers have repeatedly said they oppose any tax increase to balance the budget. They say O'Bannon can make further spending cuts and rely on reserves.

''There are some areas that can be cut, and I think he can manage it,'' said Senate Finance Chairman Larry Borst, R-Greenwood.

According to AP, Republicans contend O'Bannon's plan doesn't go far enough in cutting property taxes and controlling their future growth, and is missing a school funding formula, among other things.

O'Bannon looked the General Assembly in the eye Tuesday, however, and told them cuts had to be made, and he asked for the legislators support.

"There is no magic wand to make the economy grow enough to recoup the dollars lost to the recession," he said. "I cannot get this job done without your help.

"We should remember why were here. To make a positive difference in Indiana."

This is not the first time O'Bannon has trumpeted his plan. According to Jeff Linder, the associate vice president of governmental relations, O'Bannon has been promoting the proposal during the past six months.

Currently, the balanced budget plan rests in the House Ways and Means Committee, which includes Muncie's representative, Democrat Tiny Adams.

Adams has said in earlier accounts that other members of the committee feel the plan needs some changes.

Linder said he expects the plan, in some form, will be passed by the committee either at the end of this week or the beginning of next week. From there, he said, it will move to the House floor for any amendments. Ultimately, a conference committee will iron out differences between the House's proposal and the Senate's.

"You got to have things moving, because if they're not moving, they're dead," Linder said.

Near the end of his speech, O'Bannon also called on legislators to adopt his tax restructuring plan.

According to the AP, O'Bannon said his plan was needed to offset higher tax bills on homeowners expected to result from court-ordered changes in the unfolding, statewide property tax reassessment.

That plan would raise sales and individual income taxes to reduce the state's reliance on property taxes, in part by shifting 50 percent of school costs from local property tax rolls to the state.


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