News From Terre Haute, Indiana

January 13, 2013

Dems: Redistribute sales/gasoline tax and repeal right to work

Arthur Foulkes
The Tribune-Star

INDIANAPOLIS — Democrat legislators are in the minority in the 2013 Indiana General Assembly, as Republicans following the November election now hold a supermajority in both the Indiana House and Senate.

There are just 31 Democrats in the 100-seat Indiana House. Flip flop that number and it represents the 13 Democrats in the 50-member Indiana Senate.

Yet, two Terre Haute Democrat legislators each are on powerful committees that hold the purse strings this year as the General Assembly is required to adopt a new two-year budget.

Rep. Clyde Kersey is a member of the House budget-writing Ways and Means Committee, while Sen. Tim Skinner is a member of the Senate Appropriations Committee and the Senate Budget Committee, which hammers out final details of Senate-House bills.

This year also marks a similar but different session for Rep. Kreg Battles of Vincennes. Battles is entering his fourth term, but first as the representative of the redrawn House District 45, which represents the southwestern corner of  Vigo County. Battles previously had represented District 64, and was matched against and defeated Rep. Bruce Borders in the November election for the District 45 seat.

“It’s like I am a red-shirt freshman,” Battles, a chemistry teacher at Vincennes Lincoln High School, said with a chuckle.

“Most people in southern Indiana are the same kind of people,” he said, adding many concerns and interests of people in District 64 are similar to people in District 45. However, one change is that counties in his former district were often near the bottom in unemployment, while in District 45, many counties are in the top 10 statewide in unemployment.

Battles said as a legislator, he has and is maintaining an emphasis on jobs and job creation.

“Quite simply, I think that is the only way that we will see real, significant and sustained long-term economic growth. It is the only way that we will see the economy turned around in a meaningful way,” Battles said.

Legislators have until Monday to file bills for consideration in the 2013 session.

Skinner is proposing to redistribute a small percentage of state sales tax and gasoline tax for distribution to counties, cities and towns, instead of the state’s General Fund, for use on local roads and streets.

“The whole intent of those pieces of legislation is trying to get money back to local units of government for streets and roads and bridges,” Skinner said. “What I hope to do is just offer some alternatives.”

He proposes that 0.67 percent of state sales tax revenue be sent to counties, cities and towns based on their proportionate share of local road and street mileage. The measure would reduce the state General Fund an estimated $47.9 million in 2014 and $49.9 million in 2015, according to the Legislative Services Agency (LSA). However, it would increase road maintenance and repair revenues to local government entities.

Skinner also proposes to redistribute some sales tax on gasoline. The bill specifies the allocation is for an amount of tax that exceeds $3, again distributing an amount above that to cities, counties and towns for local road and street funds.

The fiscal impact on this to the state’s General Fund is about $50.4 million in 2014 and $30.2 million in 2015, according to the LSA. That is based on a forecast average price per gallon of gasoline and historical gasoline sales. In 2012, about 2.7 billion gallons of gasoline and special fuel were sold in Indiana. The forecast retail price of gasoline is $3.27 in 2014 and $3.16 in 2015, including state and federal taxes, according to the LSA.

Skinner said he offered similar bills last year, which did not gain traction, but he still wants to “get a conversation going” on the problem of rural roads and streets.

“I have filed some more with some new thoughts on how to do that without adding additional taxes. These look at taxes we are paying now and trying to divert some of that into funding for local roads and streets,” Skinner said.

County officials in Clay, Vigo and Vermillion, Skinner said, express their biggest concern is road and street funding. “I think there is enough people talking about it and lobby organizations for cities and towns are talking about it, too,” he said.

Skinner said there is discussion in the state senate of even considering a flat fee on license plates sold in the state with that money going into a special fund for roads. “The legislation that I have been putting out there is to try to make sure that money is not just lost in the general fund or it does not get eaten up by Marion County, which has been a benefactor of too many of these taxes at the expense of outlying counties,” Skinner said.

“I think there will be a serious conversation about it this year. That hasn’t happened before, but I don’t think it can wait any longer,” he said.

Kersey has filed a bill he concedes will likely hit a political brick wall and likely not even be heard in a House committee. The bill is to repeal the right-to-work legislation passed last year. Kersey was among legislators who opposed the legislation and was among Democrats who walked out of the Statehouse in an effort to block its passage.

“I filed that to keep it going. I doubt seriously that [Republicans] will consider it, but in light of what happened last year, I felt like I had to at least put it out there and see what happens,” Kersey said.

The filing is also a statement, he said.

“It passed last year with a lot of controversy and I think as time goes on, probably not this year, but in four to five years when the total impact hits, I think people will be taking a second look at it,” Kersey said of a repeal.

“We feel like when companies fail to renew contracts and workers lose $5,000 to $6,000 a year in salary and lose some health benefits, as has happened in other states, then I think the impact will be strong,” Kersey said. “That loss of salary will also be felt in small businesses that depend upon the wages of working men and women to make it. I just want to keep it alive and out there.”

There is a history in Indiana with right-to-work law.

In March 1957, Indiana, though strongly unionized and heavily industrialized, became the 18th state, at the time, to adopt right-to-work legislation. However, in 1965, Indiana became the first state to repeal such legislation.

In other issues, Kersey said he hopes the General Assembly this year can fully fund full-day kindergarten. “I totally support that and Gov. Daniels pushed for that last year … but the only problem was his funding was only for one year. I think this year, we have to come up with the money to fully fund it, which is about $80 million a year,” Kersey said.

Also, there is discussion among both political parties, Kersey said, of establishing a pre-school program. “We are, I think, one of 11 states that does not have it. The earlier you start with children, the more chance of success they will have,” he said.

“I think another thing that will probably come out of this session is the decriminalization of some of our laws and I think that is long overdue,” Kersey said. “If it is done right, it will be a good thing. We need to lower the penalty for some crimes to make them equal to other states. I think that will happen.”

Kersey said with lower penalties, violators, he thinks, should go into community corrections programs instead of jail. Kersey said he believes the state should increase funding for community corrections programs similar to the one in Vigo County. “What I hope the state doesn’t do is decriminalize these laws and dump it on the community corrections at a local level and say you find the money to pay for it,” he said.

Battles said one bill he plans to file is a business tax credit for businesses that pay tuition for employees to earn a college degree. “That came directly from employers in my hometown of Vincennes, who said they would like to expand the number of employees they are sending back for an education, but are limited by resources, by dollars. But with this credit, they would reinvest it and potentially send more of their employees back to college,” he said.

“The employer wins, the employee wins and the universities win,” Battles said.

The fiscal impact of the tax credit to the state would be about $55 million, according to the LSA.

“What often is not taken into account is that a higher level of training often leads to higher skills, which means higher salary. A lot of that will come back as higher revenue for the state in subsequent years, offsetting [the cost] somewhat in the long term,” Battles said of the tax credit.

“I look at it as a reinvestment back into our community and into our workforce,” Battles said. “This is direct workforce training.”

Kersey, Battles and Skinner each said they look forward to this year’s legislative session, adding they think the session will be more conciliatory, as Republicans will work with Democrats despite the GOP’s supermajority in the Statehouse.

Reporter Howard Greninger can be contacted at (812) 231-4204 or howard.greninger@tribstar.com.