AFP touts Pence tax cut proposal in TV spot

A conservative group is launching television and radio advertisements aimed at pressuring reticent Indiana Republican legislative leaders into writing Gov. Mike Pence’s proposed income tax cut into the state’s next two-year budget.

The Indiana chapter of Americans for Prosperity, a tea party-fueled organization funded by the Koch brothers, will launch a “six-figure” advertising buy in Indiana and accompany it with emails, phone calls and door-to-door efforts.

Its goal is the same as Pence’s: To lower Indiana’s individual income tax rate from 3.4 percent to 3.06 percent, a move that would save taxpayers – and lower state revenue – by about $520 million annually.

The group’s new campaign will send a message to Republicans who dominate both chambers of the Indiana General Assembly after winning supermajorities in November’s election, said Tim Phillips, Americans for Prosperity’s national president.

“This is meant to encourage them – to show them that there are folks that have their back,” Phillips said.

“A lot of Indiana families, and I think the nation really, is watching to see what they’re going to do with this power. Are they going to kind of float along with the comfortable status quo, or is it going to be a genuinely bold attempt to get this economy moving again?”

Legislative leaders have balked at the tax cut because they prefer to boost education and transportation funding. The House did not include it in the budget the chamber passed, and key senators have said they are hesitant, as well.

Senate Appropriations Committee Chairman Luke Kenley, the Noblesville Republican who is his chamber’s top budget-writer, said Indiana is already in the process of stepping down the state’s corporate income tax and phasing out its inheritance tax.

Pence’s proposed income tax cut “sort of cuts across our present plan, and I think the trick is going to be, how do we meld these plans together and still fund the things that we think are priorities?” Kenley said.

“Obviously we want to fund schools, we want to fund roads, we want to fund higher education, and even a conservative Republican would say these are the kind of investments in the future that you have to make. So we have to reach that right balance.”

Both Kenley and House Speaker Brian Bosma, R-Indianapolis, said Thursday that a key moment will come on April 17, when an updated forecast of how many tax dollars Indiana will take in over the next two years is released.

That forecast will trigger an intense period as the legislature speeds toward the April 29 end of its 2013 session. Lawmakers say the rosier Indiana’s revenue picture looks, the more likely Pence is to get the top item on his first-year legislative agenda.

The Americans for Prosperity ad is a one-minute spot styled after one that former Gov. Mitch Daniels once ran.

It starts with powerful music and green-and-white headlines that tout the state’s economy and its surplus. Then, it abruptly switches to foreboding music and red-and-white headlines that point to House Republicans’ decision to exclude Pence’s tax cut from their budget.

Bosma said Thursday that lawmakers have cut 10 different taxes over the last decade, and are sending $360 million back to Hoosier income tax filers as credits during this year’s tax-filing season.

The House Republican budget sped up the pace at which Indiana would phase out its inheritance tax. Under current law, that tax would be gone by 2022. The House’s budget would eliminate it by 2018.

“There’s going to be a tax cut by the time we’re out of here, I’m confident about that,” Bosma said. “The question is which tax, how much, and when. My pledge is, we’re going to do the right tax in the right way in the right time.”

Pence’s budget proposal included a 1 percent bump in education funding during its first year, and more to divvy up through performance-based measure in his spending plan’s second year.

House Republicans, meanwhile, boosted education funding by 2 percent in their budget’s first year and another 1 percent in its second year. Bosma said they aimed to raise K-12 education funding to its 2009 levels, prior to a cut Daniels ordered as the state grappled with the economic downturn.

After setting aside 12.5 percent of what the state spends in a year in reserves, Pence’s budget also would have sent half the remaining surplus – if revenues meet projections, that’d be about $347 million after closing out the current budget period and next one in two years – for transportation.

House Republicans, though, said municipal officials are desperate for more guaranteed transportation dollars. Their budget included $250 million per year in extra transportation funding, and that money would not be subject to economic upticks or downturns.

“You can’t be the ‘Crossroads of America,’” Bosma said, “if you have a crumbling infrastructure.”

Club for Growth wants Bucshon primaried

Republican U.S. Rep. Larry Bucshon could face a primary challenge next year if the Club for Growth gets its way.

The anti-spending group last year helped state Treasurer Richard Mourdock unseat U.S. Sen. Richard Lugar in the Republican primary, and now says it wants Bucshon replaced by a more strident conservative.

The group launched a website called It lists Bucshon and eight others who are in seats their party is strongly favored to keep as “RINOs” – short for Republicans in name only.

On the website, Bucshon is blasted for voting to continue ethanol subsidies, to keep the National Labor Relations Board and more. The two-term Indiana congressman’s lifetime rating of 68 percent on the Club for Growth’s scorecard is highlighted.

“Big government liberals inhabit the Democratic Party, but they are far too common within the Republican Party as well,” said Club for Growth president Chris Chocola, a former Indiana congressman who now leads the national group.

“The Republicans helped pass billions of dollars in tax increases and they have repeatedly voted against efforts by fiscal conservatives to limit government. will serve as a tool to hold opponents of economic freedom and limited government accountable for their actions.”

The Club for Growth’s move comes as hard-line conservative groups battle with organizations such as Karl Rove’s Conservative Victory Project, which are advocating pragmatic approaches in light of several stinging 2012 losses – including Mourdock’s.

The website lists what the Club for Growth considers Bucshon’s bad votes. Among them is his support for a deal to increase the federal debt ceiling. He served on a joint House-Senate conference committee that negotiated a transportation funding deal that the group also criticizes.

Bucshon’s office shrugged off the Club for Growth’s criticism, pointing out that in 2012 he voted with the organization more often than did U.S. Rep. Paul Ryan of Wisconsin, last year’s Republican vice presidential nominee.

His office also touted an award Thursday from the American Conservative Union. The chairman of that group, Al Cardenas, said Bucshon “shows a consistent commitment to conservative principles.”

“Club for Growth is a Washington, D.C.-based organization that certainly has a right to their opinion,” said Bucshon spokesman Nick McGee.

“Dr. Bucshon has a strong conservative voting record and was successfully reelected by a 10 percent margin in his last election,” he said.

“He has confidence his constituents in Indiana will continue to assess his record of consistently fighting to cut spending, keep taxes low, bring good paying jobs to Hoosiers, and reform healthcare and not rely on a D.C. based organization to assess it for them.”

Although the website includes a button for viewers to “recommend an opponent,” no one has announced a primary or general election bid against Bucshon.

Still, he’s used to both. Bucshon emerged from a crowded field of contenders to win the GOP nomination, and then survived a one-on-one matchup with that year’s second-place finisher, Owen County activist Kristi Risk, in 2012.

Democrats have targeted the seat, with the Democratic Congressional Campaign Committee including it in the group’s “Red to Blue” program the last two elections. However, neither former state Rep. Trent Van Haaften nor former state Rep. Dave Crooks ultimately came close to defeating Bucshon.

Indiana Democratic Party chairman Dan Parker quickly sought to use the Club for Growth’s move as a fundraising tool, blasting an email out Wednesday to the party’s supporters that highlighted

“This is exactly what Republicans did to Richard Lugar last year. You’d think they’d have learned their lesson,” Parker wrote. “We keep hearing Republicans are on a mission to unite their party and attract new voters, but it looks to us like they’re still in self-destruct mode.”

Some Indiana Republicans, meanwhile, rushed to Bucshon’s defense.

“Bucshon is a bright pragmatist who has made a quick name for himself in Congress, particularly in his role as a leader on matters pertaining to finding solutions to improve our nation’s transportation and infrastructure system,” Mike O’Brien, the Hendricks County GOP chairman and former Gov. Mitch Daniels aide, wrote in a blog post.

“The formula used by the Club is particularly rigid and ignores the unique political realities of Indiana’s long-embattled 8th District.”

In reversal, Indiana will continue unemployment benefits

Gov. Mike Pence’s administration quickly scrapped its plans to stop 32,000 Hoosiers’ unemployment payments as a result of looming federal spending cuts – a move Indiana looked like it would be alone in making.

The reversal occurred just hours after Pence’s Indiana Department of Workforce Development had initially announced it would put all benefits on hold rather than guess at how much federally-extended unemployment payments should be reduced.

A two-sentence email from Gay Gilbert, the U.S. Department of Labor’s unemployment insurance administrator, said the “sequester” would not affect benefits in early March and that more information would come on a Friday conference call.

That was enough to satisfy state officials, who quickly said they would continue payments that average $275 a week and go to those who have been out of work at least 26 weeks.

“In response to the state of Indiana’s request for additional guidance, late this afternoon the U.S. Department of Labor confirmed that unemployment benefits will not be impacted by sequestration through the week ending March 9, and additional guidance will be forthcoming,” said DWD Commissioner Scott Sanders.

“As such, the Indiana Department of Workforce Development will proceed with full payment of extended unemployment compensation until further notice.”

Indiana provides state unemployment benefits for the first 26 weeks that Hoosiers are out of work, but then federal funding kicks in to extend the program through 63 weeks. Federal officials had warned that benefits would be cut by 9.4 percent, but DWD spokesman Joe Frank said the agency also needed to know how and when to implement those changes.

The email from Gilbert that prompted the DWD to reverse course said: “Yes – I can definitely confirm that the weeks ending 3/2 and 3/9 for EUC will not be impacted by sequestration. We are working to get you more information as soon as feasible and anticipate holding a state call on Friday, March 1st.”

The Pence administration’s initial move – which the governor did not mention earlier Wednesday during a news conference in which he discussed how the sequester would affect Indiana – was quickly criticized by the U.S. Department of Labor, which called it premature, and by labor lawyers who said Indiana might run afoul of federal law.

Citing sequester, Indiana to stop unemployment benefits

Indiana is stopping 32,000 Hoosiers’ unemployment benefits at the end of this week, citing uncertainty over how the looming “sequester” could affect the federal government’s funding for the program.

The move by Gov. Mike Pence’s administration will pause the Indiana Department of Workforce Development’s payments, which range from $50 to $390 and average $275 per week, to those who have been out of work more than 26 weeks.

So far, Indiana is the only state so far to announce that it will stop payments outright, rather than planning to reduce them by about 9.4 percent – the amount that the U.S. Department of Labor has told states will be cut from unemployment benefits.

The state is doing so because it wants more direction on how to implement those cuts – and is worried that it might wind up having to recoup any overpayments made to benefit recipients in the meantime, said DWD spokeswoman Joe Frank.

He said Indiana officials are also worried as well that federal benefits extensions might be used by Congress as a bargaining chip in negotiating a deal to avert the sequester.

“The best course of action, everyone determined, was to hold off on giving everyone benefits because if we give people too much, then we’re required by the federal government to get that money back,” Frank said.

“The great part about this though is our system is such that folks apply online — we can turn it around really quick; we just need guidance.”

Indiana provides state unemployment benefits for the first 26 weeks that Hoosiers are out of work, but then federal funding kicks in to extend the program through 63 weeks.

A spokesman said the U.S. Department of Labor told Indiana officials Wednesday that more direction on how to implement cuts forced by the sequester is coming soon, and that the state should take down its notice that benefits will be stopped next week.

Frank said the Labor Department arranged a phone call with state officials for Friday – and that until then, the state will continue with its current plan.

“They haven’t given us any guidance yet, so we can’t make any changes,” he said. “We definitely hope that on Friday we’ll hear something concrete from them.”

The Pence administration’s move – which the governor did not mention Wednesday during a news conference in which he discussed how the sequester would affect Indiana – was quickly criticized by labor lawyers who said Indiana might run afoul of federal law.

“We’re not aware of any state that has decided to suspend the benefits, and in our view, doing so flatly contradicts basic federal requirements that states pay federal benefits on time,” said Maurice Emsellem, the policy co-director for the National Employment Law Project.

Frank said the state is “doing our best to hurt people in the least amount possible.” But Emsellem said Indiana’s decision is “paternalistic” and would impose a “cruel hardship” on those who have been out of work for months.

“This has been a struggle, to say the least,” said Sherri Summit, a 48-year-old who lives in Unionville, Ind. and has been out of work for nine months.

Summit is a single mother who has three children – one who’s an adult, but another who she’s helping foot college bills and a third who is 10 years old – and lost her previous job in May 2012, three weeks after starting with a new company.

She said the $368 she’s received each week in unemployment benefits have kept her afloat, although she’s two house payments behind.

“I don’t use any other government assistance – food stamps, anything like that. When I’ve gotten a little bit behind on things, my church has pitched in,” Summit said.

“It just gets really scary. I don’t have any health insurance; I have to pay for my medicine on my own. Where do you cut back when you’ve already cut back? Do you lose your home?”

Senate approves Rockport measure

After the Indiana Supreme Court has its say, the Rockport coal-to-gas project could head back to state utility regulators for another round of reviews under a measure the Senate approved Tuesday.

It’s a watered-down version of a bill that originally would have left the plant dead in its tracks by forcing major changes to the Indiana Finance Authority’s 30-year contract with the plant’s developers, Leucadia National Corp., to buy and then resell its product.

Senate Bill 510 passed on a 47-3 vote and now heads to the House, where Leucadia and its opponents – chiefly, Vectren Corp. – will continue to grapple.

“If you followed this through its beginning stages, it’s been through about five different iterations,” said the bill’s author, Sen. Doug Eckerty, R-Yorktown. “I think what we’ve done is settle here on some language that works for everybody.”

The haggling is over the future of a contract that would tie 17 percent of all gas customers’ bills to pre-negotiated rates included in the deal, rather than open-market rates that make up the other 83 percent of Indiana ratepayers’ bills.

The bill would postpone any action until the legal process has wrapped up. The Indiana Court of Appeals last year struck down a narrow provision in the state’s contract, but upheld most of it – leaving the contract voided but the case’s shift to the Indiana Supreme Court likely.

If the five-member high court ultimately upholds the appellate court’s ruling or issues a decision anything short of a full approval of the contract, Eckerty’s bill would then send that deal back to the Indiana Utility Regulatory Commission.

The commission would be tasked with launching a comprehensive review of whether the deal is in the “public interest,” including determining whether the Rockport prices are likely to top open-market rates long term.

Sen. Karen Tallian, D-Portage, was one of the three “no” votes even though she’d initially co-authored the bill. She said her problem is a provision that would have the loser of legal battles related to the plant pay the winner’s attorney fees.

“Can’t live with that – have to vote no, sorry,” she said.

Sen. Jean Breaux, D-Indianapolis, said she preferred the bill Eckerty had initially introduced, which would have altered the ratepayer protection mechanisms in the contract to force Leucadia to reimburse ratepayers for any losses that come from their prices compared to open-market rates every three years – rather than at the end of the 30-year deal, when developers could have to hand the plant over if ratepayers have lost money because of it.

Still, Breaux said she’d support it – and hopes the bill can be beefed up over time.

“I would hope that throughout the process that we might allow a little stronger language to really give the IURC the direction so that it can make a decision that would really be in the best interest of the ratepayers over the long haul of the contract,” she said.

Sen. Brent Waltz, R-Greenwood, compared lawmakers to ancient Romans who, he said, required engineers to live under bridges they designed for six months. Lawmakers must “live with the bridges that we build,” he said.

“Hoosier ratepayers were standing under, I think, a very shaky bridge,” he said.

In its current form, the bill would seem to send the contract back to utility regulators for another review if the Supreme Court upholds the Indiana Court of Appeals’ decision to void it based on a narrow provision that state and Leucadia officials say they’re happy to drop.

But House Speaker Brian Bosma, R-Indianapolis, said he’d look for the Supreme Court to more fully reject the contract if it’s to undergo another such review.

“It’s a very thorny issue,” he said Tuesday. “The state made a deal, and whether it’s a fair deal or not today, we made a deal and we passed the statutes. So, my inclination would be not to overturn a deal – but I also believe it might be productive for the utility regulatory commission to take one more, fast look at it to be certain that long-term, this deal is good for ratepayers.”

The issue will soon move to the House Utility Committee, where chairman Rep. Eric Koch, R-Bedford, will play a key role in determining whether the bill should undergo changes.

Abortion bill wins Senate’s approval

Women seeking abortion-inducing drugs would have to get ultrasounds first and the clinics that prescribe them would have to follow a new set of regulations under a measure approved by the Senate on Tuesday.

The bill passed on a 33-16 vote despite a chorus of complaints from opponents who said it’s a step too far into doctors’ offices without improving their patients’ health.

“This bill is not about patient safety. It’s about patient harassment,” said Sen. Vaneta Becker of Evansville, who was one of only four of the Senate’s 37 Republicans to join the 12 Democrats who opposed the bill.

Now, Senate Bill 371 heads to the House, where Republican Speaker Brian Bosma of Indianapolis said he expects it to win passage as well – perhaps after some changes.

The bill would make Indiana the ninth state to require ultrasounds before abortions. It would also require clinics that prescribe the abortion-inducing drug RU-486 to meet the same standards as surgical clinics, even though it would not impose that same requirement on private physicians.

That portion of the measure would directly affect Planned Parenthood’s clinic in Lafayette, Ind. That clinic prescribes patients the drug, but does not offer surgical abortions.

“This bill is directly targeted to Plannd Parenthood in Lafayette, Ind. That’s all it’s about, is getting at Planned Parenthood in Lafayette, Ind.,” Becker said.

“When you do this, you’re not doing anything that will improve the health and safety of low-income women in the state of Indiana. All you’re doing is forcing them to go other ways – in particular, to the internet – to get this same particular drug that you’re talking about regulating.”

Tuesday’s debate on the Senate floor was controlled almost entirely by opponents of the bill.

Democrats argued that for women seeking abortions, the bill aims to “make it as difficult as possible, make it as intrusive as possible, and then maybe somebody will change their mind,” said Sen. Greg Taylor, D-Indianapolis.

“This is not going to help women be healthy. This is just going to make it harder for them to get an abortion,” he said.

Another Democrat – Sen. Jean Breaux of Indianapolis – said the bill would lead women to order the drug online rather than visiting a doctor at all.

“The backers of this bill,” she said, “are interested in making abortion, which is a safe and legal procedure, less accessible to Hoosier women.”

The bill has been controversial because it could – especially in early stages of pregnancies, when the abortion-inducing drug is more likely to be prescribed – require doctors to perform more invasive transvaginal ultrasounds, rather than “jelly-on-the-belly” abdominal ultrasounds.

Though doctors say they recommend ultrasounds before any abortion, opponents said it’s inappropriate to mandate the procedure.

The only senator to speak in the bill’s favor was its author, Sen. Travis Holdman, R-Markle.

“I am not active in a Right to Life organization. I introduced this bill because my own religious conviction and my respect for life and the health of women,” Holdman said.

“There has been no regulation of abortion-inducing drugs in the state of Indiana, and there are a number of us that believe that we need to have some regulation.”

Senate drops second ultrasound from abortion bill

Indiana would still become the ninth state to require women seeking abortions to have an ultrasound first under a measure that’s set for a vote Tuesday in the state Senate.

But lawmakers decided to drop language that would have required a second ultrasound – that one two weeks later, to confirm that the pregnancy was terminated.

The change came Monday as the Republican-dominated Senate debated a bill that also requires clinics that prescribe abortion-inducing drugs that are taken orally to meet the same regulatory standards as locations where surgeries are performed.

The bill has become a lightning rod, with abortion opponents arguing that it’s necessary to oversee clinics that operate in the state’s regulatory shadows and pro-choice advocates calling it an intrusive step into women’s relationships with their doctors.

“It makes a lot of sense to have basic health standards so that a woman going in for a chemical abortion knows that those standards are being met,” said Becky Rogness, the Indiana Right to Life communications director.

“It is intended to confuse and shame women who are already dealing with a difficult situation. It’s the last thing they need,” said Betty Cockrum, the president of Planned Parenthood of Indiana.

Senate Bill 371 is part of a trend as legislatures across the nation, especially in conservative states, advance similar measures to require ultrasounds before abortions and also to impose new restrictions on abortion-inducing drugs.

“We’re still in the midst of this wave,” said Elizabeth Nash, the state issues manager for the Guttmacher Institute, a Washington, D.C.-based organization that studies reproductive health worldwide.

Eight states already have laws on the books that require women who are seeking abortions to first receive ultrasounds.

Louisiana and Texas require abortion providers to perform an ultrasound and then display and describe the image. Alabama, Arizona, Florida, Kansas, Mississippi and Virginia require ultrasounds and for women to be offered the opportunity to view the image.

Two more states – North Carolina and Oklahoma – have laws requiring ultrasounds, but courts have struck those laws down. A more influential legal decision came, though, when a federal court upheld the Texas law.

Opponents of those laws, Nash said, typically are supportive of the idea that ultrasounds are usually appropriate before abortions.

“Quite honestly, as a part of abortion care – an ultrasound is relatively routine. It’s not always medically necessary, and so what we’re really talking about is how far the legislature can place itself into medical care,” she said.

“What abortion restrictions just fail to take into account are the individual woman’s needs. What the state is proposing here is a one-size-fits-all solution to medical care when we all know that each patient is different.”

That was the crux of the argument one Republican senator made Monday when he successfully pushed an amendment to drop from the bill what would have been a second ultrasound requirement – this one, about 14 days after the abortion.

“I think that physicians know a little bit more about that particular area than legislators,” said Sen. Ron Alting, R-Lafayette.

After his amendment, the bill still requires a follow-up appointment but allows doctors to confirm that the pregnancy was terminated “any way that he or she was trained.”

The bill was introduced by Sen. Travis Holdman, R-Markle. He said Alting’s change made sense, but that requiring ultrasounds is necessary to make sure abortion-inducing drugs aren’t given to women with ectopic pregnancies.

“I don’t move in the political Right to Life circles in the state of Indiana. I introduced the bill because of my faith and my religious belief that we need to do something to protect the mother,” he said.

“We’re dealing with an unborn child here, as well, and I felt that we just need to regulate abortion-inducing drugs.”

Holdman’s bill requires clinics – but not private physicians – that prescribe the RU-486 abortion pill to meet state standards for surgical clinics. It would directly affect just one clinic – Planned Parenthood’s Lafayette location, which offers the pill but not the surgical procedure.

Rogness said surgical centers “have the doctor that’s present. They have standards for the facility so that in the unfortunate case that there was a medical emergency, a stretcher could get into the room.”

But Cockrum said factors such as “doorway width and hall width” have nothing to do with whether doctors should prescribe a set of pills that patients take by mouth.

“It’s a smokescreen, and what they would do if they pass this bill is very likely cause the medication abortions provided in Lafayette to shut down, and what that means is it reduces access for women here in Indiana,” Cockrum said.

Another bill set for a vote on Tuesday – Senate Bill 489, authored by Sen. Michael Young, R-Indianapolis – would require that women considering abortions be given informational pamphlets that include color photographs of fetuses at various stage of development. Current law requires that information be distributed, but not that it be in color.

Both bills were the subject of contentious arguments on the Senate floor Monday.

Democrats sought to amend the bill requiring ultrasounds to also require prostate exams for men seeking erectile dysfunction medication.

It was authored by Sen. Jean Breaux, D-Indianapolis, who said she is upset by the ultrasound requirement. “At first glance, my amendment might look like a tongue-in-cheek amendment,” she said. “But it really seeks to make a point about what it is we’re doing here.”

Vectren and Rockport developers continue battle

The battle between Vectren Corp. and developers of the coal-to-gas plant proposed to be built at Rockport, Ind., continued in the state Senate Monday as a senator took aim at Vectren’s coal purchases.

The chamber was debating a bill that could trigger another round of regulatory reviews of the state’s 30-year contract to buy and then resell the synthetic natural gas produced at the plant being financed by Leucadia National Corp.

Sen. Lindel Hume, D-Princeton, offered an amendment that was a shot at Vectren, which has opposed that Rockport plant.

His proposal would have required utilities such as Vectren that purchase coal from their own subsidiaries to pay the average market price for that coal, rather than higher prices they’ve negotiated for themselves.

“They cannot gouge the consumer. They can simply pass along the going rate for coal if they bought it on the open market,” Hume said.

“Even though it isn’t a problem at this point, it has been — we’ve seen that it did take place, and people were paying significantly higher than they should’ve been, and this would put a stop to that kind of thing.”

His proposal was ultimately voted down as senators decided it had little to do with the overall bill.

GOP blocks Democratic Medicaid expansion effort

Majority Republicans again blocked efforts by Democrats to have Indiana expand its Medicaid program for a three-year period during which the federal government would pick up the full tab for covering 400,000 Hoosiers.

State Senate Democrats offered a measure Monday that would have ended the expansion as soon as the federal health care law stopped covering its full cost.

It was an amendment to Senate Bill 551, which would trigger such an expansion only if the U.S. Department of Health and Human Services allows Indiana to have a block grant and use its health savings account-based program as the vehicle for the expanded coverage.

The proposal was modeled after Republican Florida Gov. Rick Scott’s decision to expand Medicaid for at least three years because, he said, failing to do so would force his state’s taxpayers to subsidize care elsewhere.

“We cannot be known as Indiana, the island of the uninsured,” said Sen. Karen Tallian, the Portage Democrat who pushed the amendment. She noted that the state’s neighbors – Illinois, Ohio, Michigan and Kentucky – are each moving forward with expansions.

Tallian also pointed to an Indiana Hospital Association study that found an expansion could draw $10.5 billion in federal Medicaid payments into the state between now and 2020, drawing about 30,000 jobs along the way.

“My proposal is simple and it’s a minimal offering. Accept the expansion now, through the end of 2016, when the federal government is paying 100 percent,” she said.

Senate Republicans, though, quickly rejected Tallian’s effort. The chamber’s  two top fiscal leaders said they are unconvinced that federal officials would keep their bargain – and even after three years, they said, the state couldn’t easily drop coverage for those new enrollees.

Senate Tax and Fiscal Policy Chairman Brandt Hershman, R-Lafayette, criticized the “irrational exuberance about this pot of federal money that makes it seem like a birthday and Christmas rolled into one.”

He said that the “concept that this is free money is just flat-out wrong,” and that “this is being financed on a federal credit card.”

The Senate will vote Tuesday on the full bill, authored by Senate Health and Provider Services Chairwoman Patricia Miller, R-Indianapolis.

The Medicaid expansion was a key part of President Barack Obama’s landmark 2010 health care law, but was thrown into jeopardy when the U.S. Supreme Court ruled last year that states could opt out of it.

For states that do grow their Medicaid rolls to include residents earning up to 138 percent of the federal poverty line – or around $32,000 a year for a family of four – the federal government will pick up the full tab the first three years, and then its share will taper off to 90 percent by 2020, with states paying the difference.

Gov. Mike Pence has compared the expansion’s impact on the state’s budget to the federal government gifting Indiana with a “baby elephant” that it would feed in its early years, and then hand over as a full-grown animal with an insatiable appetite.

By 2022, the Urban Institute estimates that 943,000 Hoosiers will be eligible for Medicaid – including 72,000 who meet current eligibility requirements but aren’t signed up – if Indiana declines to expand the program.

Another 495,000 Hoosiers could qualify for coverage if the state does move forward with an expansion. That would reduce the state’s 867,000 uninsured residents, and it would cost the state $537 million by 2022 according to the Urban Institute, but Indiana’s actuaries have estimated the cost would be much higher.

Pence has asked the federal government to approve the Healthy Indiana Plan, which used health savings accounts, as a vehicle for a Medicaid expansion. Only if they say “yes,” he’s said, will he make a decision on whether to do so.

House sends $30 billion budget to Senate

A new state budget that omits Gov. Mike Pence’s proposed income tax cut in order to boost education and transportation funding won the Indiana House’s approval late Monday.

The two-year, $30 billion spending plan advanced on a 68-28 vote, with Republicans supporting it and Democrats opposing, after a marathon day of debating bills ahead of the House’s midnight deadline to send bills across the hallway to the Senate.

It boosts overall K-12 education spending by 2 percent in its first year and another 1 percent in its second year, puts more aside for a tuition reserve fund, and pumps an extra $250 million per year in gas and sales tax revenue for state and local transportation funding.

“It’s balanced. It spends less than we bring in, so there’s a structural surplus,” said the House’s chief budget writer, Ways and Means Committee Chairman Tim Brown, R-Crawfordsville.

“It has a long-term commitment to education,” he said. “We’re starting to build back some of those tuition reserves so that for the next economic cycle, we’ll be prepared.”

Rep. Greg Porter of Indianapolis, the top Democrat on the House Ways and Means Committee, complained that the budget did not include enough for education, teacher training and public health.

“We hurt our people here in Indiana,” Porter said. “This is not a jobs bill. This does not help the middle class.”

The House Republican budget does not include the top priority on Pence’s first-year legislative agenda – a reduction in Indiana’s individual income tax rate from 3.4 percent to 3.06 percent, which would reduce state tax collections by about $520 million annually.

That, Pence has said, left him “very disappointed.” He said he’d continue lobbying lawmakers – and when those lawmakers get an updated forecast of the state’s revenues over the coming two years in April, that’s expected to be the make-or-break point for Pence’s tax cut.

The spending plan was the first drafted by Brown, who took the helm of the budget-writing committee this year. It’ll now move into the hands of his counterpart, Senate Appropriations Committee Chairman Luke Kenley, R-Noblesville.

The bill pumps 20 percent of the sales tax revenue collected on gasoline purchases into transportation and also uses more of Indiana’s 18-cents-a-gallon gas tax for that purpose, addressing a need a group of mayors raised this year.

“It will offer sustainable funding within the structural surplus for roads and bridges – jobs now,” Brown said.

That’s a departure from Pence’s budget, which included extra funding for transportation only by including a trigger that would send part of the state’s surplus into an infrastructure fund – a move he estimated would amount to $347 million once the current budget is closed out and his two-year budget proposal is also closed out.

Under the House budget, the Evansville Vanderburgh School Corp., which received $142 million this year, would get an extra $2.1 million in the budget’s first year, and then $1.5 million on top of that in the second year.

The Warrick County School Corp., meanwhile, would get a 2.6 percent bump in the first year, from $57.5 million to $59 million, and then another 1.3 percent increase in the budget’s second year, to $59.8 million.

Gibson County schools would all see slightly smaller annual funding increases, while Posey County schools’ funding would flat-line in the spending plan’s first year and then drop slightly in its second year.

Those amounts are impossible to compare to Pence’s budget, since governors typically leave it to lawmakers to write school funding formulas. Still, Pence would have them divide up $63 million less in overall annual funding.