It"s about a week before the session and the new speaker of the House is wrapping up a few things at his Ivy Tech office in South Bend before taking his wife to lunch. For a thumbnail sketch of Pat Bauer, try that dwarf from Lord of the Rings: same build, same chip on the shoulder, different kind of ax. He has a modest office on the third floor of the administration building at the Ivy Tech campus. In contrast to his Statehouse office in Indianapolis, there are no personal photos on the desk. Folded newspapers and files fill an open cabinet above his head.
There are people who want to figure out what"s spinning around Pat Bauer"s head. For most of the public, though, the General Assembly generates a yawn as large as the looming budget deficit. Inside the slender beltway of Indiana politics, many wonder if the new speaker will grow into his new role and what his ascension from Ways and Means chairman means for the state budget, estimated to reach $22 billion for the next two years. In a state where Rush Limbaugh would be comfortable in the Democratic Party, Bauer comes about as close as Indiana gets to a traditional liberal. On the other hand, he"s a known quantity among lobbyists and lawmakers. The often-snarling Democrat from South Bend has been in the General Assembly since 1970 and ran the powerful Ways and Means committee, which crafts the state"s budget, for most of the last decade. There is no question that Bauer walked away with the vote for speaker in a closed door party vote in November on the strength of his ability to find cozy nooks and crannies in the budget for the projects of fellow members. Unlike his predecessor, the friendly but distant John Gregg, Bauer is eager to talk. But his training at Ways and Means has made him a tough interview. Long ago he mastered speaking in spiraling dipsy-doodles that begin as diatribes, blasting the opposition, and then trail off into inaudible mumbles that may or may not undermine what he"s just said. You can tell Bauer"s working on curtailing that for his new job. He laughs more, smiles more. Hard to tell how long this will last. Will he eventually use his single-vote Democratic majority to thwack away at the Republicans? He says definitely not. "This state faces some very serious problems. We will have to work together to reach a consensus," he says. A rising stock in the party With the announcement that Lt. Gov. Joe Kernan will not run for governor in 2004, Bauer"s stock is rising in the Democratic Party. His governor, Frank O"Bannon, is prohibited from running again. Bauer is now just behind Sen. Evan Bayh as the highest ranking Indiana Democrat. The two men couldn"t be more different. On the national level, Democrats have shown a crisis of confidence, unable to mix it up. Exactly how many times has Bayh been on the Fox News Network praising the president? With Bauer you get brand loyalty - from the days when being a Democrat meant something other than where you target your tax cuts or how much you support the latest troop movement. You get support for public education and organized unions. You get money for health care and prescription drugs for senior citizens. Your tax breaks go to folks who own mobile homes. The stuff John F. Kennedy and Franklin Roosevelt liked. Less New Democrat, more New Deal. To bring Indiana out of recession, Bauer wants to bond for more road construction - an almost unheard-of approach in a day and age when economic stimulus has come to mean cutting government and growing tax breaks. "I think that"s what we need to do [build roads]. Target the things we need in this state and put people back to work. That"s the way to grow the economy," Bauer maintains. After Gregg opened up the speaker"s race in the last session, Bauer went to Rep. Bill Crawford (D-Indianapolis) and asked him to become chairman of Ways and Means, a first for an African-American. This was the reason Crawford decided to run for another term. And Bauer won the unified support of the Black Caucus. When committee assignments were returned, five African-Americans chaired House committees, a record number for Indiana. Bauer is very touchy about being labeled a liberal. It"s something to be avoided in Indiana. Crawford danced around the issue by saying, "Pat has the kind of thinking I would associate with lawmakers coming from South Bend." Bauer is from working-class, industrial South Bend. Gregg was a barrel-chested Dixiecrat from conservative, southern Sandborn. "John Gregg was very loveable, but it was often hard to tell where we were going," observes Rep. Duane Cheney (D-Portage), a retired negotiator for the state teachers union. Privately, some Democrats are more blunt: One lawmaker laments, "We got tired of pushing a bunch of Republican bills." The chip on the shoulder is talking Bauer reads poetry as a hobby. To the bewilderment of many, at the end of the first Ways and Means committee of the special session in June, he left the audience with the line, "I have promises to keep and miles to go before I sleep," from Robert Frost"s "Stopping by Woods on a Snowy Evening" - the poem Frost read at Kennedy"s inauguration. "My mother was the director of plays at St. Mary"s College for years. She memorized hundreds of poems. She would say poetry all the time and some of it rubbed off on me, I guess." Let"s not get crazy here. Bauer is not John Kerry or Bill Bradley. During our interview, he asks about NUVO. "They call that alternative. Now, is that alternative for Indianapolis or alternative lifestyle?" He seems greatly relieved when I tell him NUVO is alternative to mainstream newspapers. He talks about The Indianapolis Star, stopping short of saying they"re against him and Democrats, a common refrain among Democrats in state government, from the Governor"s Office through the General Assembly. Bauer does say he was never asked to appear before The Star"s editorial board in his years of chairing Ways and Means. That"s the chip on the shoulder talking. Bauer acts like a guy who"s been kicked around some. He spent most of his tenure in the minority. His father was a state representative and, later, a state senator. Dad had only one year, 1965, when he was in the majority in the House. One of Bauer"s mentors is Mike Phillips, who was speaker from 1988 to 1993. Friends of Phillips say he was the consummate partisan. His life revolved around political strategy. On morning walks from the Athletic Club in downtown Indianapolis, Phillips would stop people on the street to ask how they reacted to a tax increase or some other bill bubbling through the session. If Bauer follows in Phillips" footsteps, it will be seen in the procedural rulings that decide which bills are debated and which are left to be killed by the deadline. "You haven"t done your job if everybody likes you," Bauer says. "There is a quote from my good friend Abraham Lincoln, "You can"t please all of the people all of the time." If you try, you can"t get anything done, by the way." The state is broke Right now, Bauer is talking about building consensus. Because he commands a single vote majority, he"s likely to need some Republican votes to pass a budget out of the House. The state is broke. More than any other state, Indiana"s economy is tied to manufacturing and has been slow to pull out of the recession. The state Budget Agency is projecting an $850 million deficit before the fiscal year sputters to a close at the end of June. Last June, Indiana passed several tax increases to blunt the effect of property tax reassessment and balance the budget, but it didn"t do the job. Bauer said they didn"t go far enough; now they lack the political capital for another try. Whatever his personal politics, Bauer is mainly a pragmatist. Since organization day in November, he has floated the idea of postponing the property tax reassessment for a year, suspending the tax breaks promised for businesses and homeowners and using the recent 1 percent increase in the sales tax to balance the budget for a year. He claims that the sales tax increase is enough money to close the budget gap. The business community has so far rejected that idea. The courts may not go along with it, anyway. O"Bannon has instead proposed bonding based on a percentage of Indiana"s share of the National Tobacco Settlement as the centerpiece of his Energize Indiana plan. Several states have made similar loans but Indiana earned praise in 2000 with its pledge to use all of its revenue for health-related concerns. "I"m not convinced that it is the right thing to do," observes Rep. Charlie Brown (D-Gary), chairman of the House Public Health Committee. Bauer has already divided the governor"s package among three committees. Brown, who authored the state"s settlement budget with Senate Finance Chairman Larry Borst, will oversee the governor"s bonding proposal. On the surface, letting Brown handle the bonding would be a signal that Bauer is willing to let the O"Bannon proposal die. Here"s how years of running Ways and Means has trained the new speaker: The state could use the settlement money for the governor"s economic development package or, Bauer suggests, the state could use it for health-related Hoosier Rx, which is already funded by the tobacco settlement and provides prescription drug coverage for seniors. Or, it could go to the CHIPs program that insures the children of the poor. "These are programs we have had a commitment to in the past. If you are going to take the extra money from the tobacco settlement perhaps you need to start there," Bauer says. See what just happened? Money is lifted from the governor"s economic development plan. It"s moved to programs that off-set the budget deficit, which is Bauer"s main concern, and in the process the speaker finds more money for programs close to his heart. He also helps Brown keep his promise that all money from the tobacco settlement is used for health-related programs. None of this is set in stone. It"s just an idea, Bauer says. The business community is positively howling at delaying tax breaks. But that is what the legislative session is for - not so much to come up with good ideas but to have enough time to convince everyone that ideas like these aren"t so bad, after all. There are other schemes floating about, including letting the governor have his way. No one is exactly certain where the relationship stands between Bauer and O"Bannon. Bauer didn"t attend the press conference for Energize Indiana. After shepherding the governor"s tax and budget package through the House during the special session, Bauer tried to get O"Bannon to reject the compromise reached with the Senate Republicans. O"Bannon sided with the Republican Senate. The deal netted $650 million in new money to off-set the deficit that loomed in the current budget. The total may be shrinking closer to $450 million in new money, after the taxes on riverboats netted about $100 million less than expected, according to the budget agency. Bauer"s House bill was estimated to bring $1.1 billion in new money. "There is no question that if we had passed the House bill we would have been in a much healthier situation," Bauer says. Energize Indiana is also crippled by Kernan"s departure. The positive spin is it will allow Republicans to get on board because they no longer have to posture for the governor"s race. Privately, Democrats wonder who"s left to lead the charge. Bauer insists he had a good relationship with the Governor"s Office. He says he also has a close relationship with Kernan, who was mayor of South Bend before being tapped by O"Bannon in 1997. Bauer says that "The lieutenant governor and I worked very closely together on 1001 [the tax package passed in the special session]. We have worked closely in the past." The billion-dollar black hole There is an art to these things. Bauer is already turning up the pressure by calling the deficit a "$1 billion black hole." Cutting that much would almost undoubtedly mean cuts in education, which both parties vow is sacred. The dirty little secret is that the state took over 60 percent of the local school general funds in the special session as a way to lower property taxes. It means education alone is more than half the state general fund. The vast majority of Medicaid is federally mandated. Bauer claims it is politically hopeless to cut optional programs. Prisons are the next biggest item. The rest of the state general fund, everything from the governor"s staff to the state police, is less than $850 million. Twice during our interview he asserts that the budget forecast was mis-handled in December. "It was a disservice, what came out of the budget committee, when they said it was a mixed picture. It"s not a mixed picture. It"s a serious problem. The Governor"s Office should be informing people about the serious nature of the problem," Bauer says. After a call from Bauer and other lawmakers, the State Budget Director"s Office sent a press release to the Statehouse media, hammering home the dark fiscal outlook. As in most states, the growing deficit is eating away at the next budget. The deficit is caused mainly by a raise in Medicaid and unemployment benefits and falling tax collection. Lawmakers budgeted increases in tax revenue and instead got decreases each of the last two years. While acknowledging the dire state of the state, Bauer is not giving up on some wiggle room. The Black Legislative Caucus is planning to target the achievement gap in Indiana with a legislative package. Asked if there would be any money to pay for new programs in education, Bauer replies, "Not the first year. I think the first year your goal will be to not make any cuts. In the second year, I think you can do programs." Wheeling and dealing His wheeler-dealer reputation has left Bauer dogged by charges in recent months. He sponsored a $10,000-per-person fund-raiser for himself and four other lawmakers at the Indianapolis 500. The money gave him the ammunition to win friends in the speaker"s race. Most of the criticism surrounds donations by lobbyists who work for the gaming industry, including Mike Phillips and Phil Bainbridge, another former Democratic speaker, who worked last session for the riverboats to get dockside gaming. Bauer says he has no regrets. He points out that the same lobbyists show up at all fund-raisers. "All but one of the top law firms have gaming clients. You can"t separate them out," Bauer says. Indiana does not allow direct contributions from casinos, but it does not stop lobbyists with multiple clients from making donations. The loophole makes the law virtually unenforceable, according to Common Cause. Ironically, Bauer once suggested toughening the restriction, but was stopped by Larry Borst, the Republican chairman of Senate Finance. Borst received headlines when he railed against the influence of gaming lobbyists at the end of last session. You want heroes? Play a video game. Bauer"s mentor, Phillips, has lobbied on behalf of racetracks for pull-tab slot machines at the tracks and at off-track betting parlors in Indianapolis. Bauer will now be watched closely for the influence of gaming on this session. After receiving both dockside gaming and a tax increase in the last session, the riverboat casinos have thus far been talking about staying on the sidelines. Bauer shows sympathy to pull-tabs. As speaker, John Gregg segregated gambling bills in the last two sessions. Though Gregg voted against gambling, his decision to funnel all the issues into a single package may have actually helped create a coalition of horse tracks, casinos and French Lick, which wants a casino license. Bauer says he will let the issues go through on their own. "I think gamers already won the war in the Senate last session. The pull-tabs are the little pawns that were left behind. I know they are probably out there trying to get through the process and it will probably be tough to do. I don"t think they have the power of the big boats." Asked if we need some controls on the General Assembly in Indiana, at least a waiting period to stop lawmakers from leaving office and popping up in the halls as lobbyists later in the week - like Rep. Mike Smith (R-Rensselaer) did when he took a job with the Casino Association in November - Bauer says he respects the committee process and will let the committees do their work. There are a few efforts out there to reform the system this session, but don"t get your hopes up. Last session, a bill to reform Build Indiana turned into a law that actually standardized how the pork from the state"s share of gaming revenue would be doled out. No longer do members of the minority parties have to grovel to the majority to have their softball fields and fire trucks tucked into the budget. They get a set percentage. In this context, relying on the committee process is like asking the frat boys to guard the keg. As Bauer knows so well, reform is a bigger shell game than the state budget in Indiana. The General Assembly tends to reform laws the way highway traffic reforms raccoons.
Legislative nibbling and tinkering
Lawmakers aren"t showing much enthusiasm as they return to the Statehouse. In June, they raised taxes, but it wasn"t enough to close the widening budget deficit. Lawmakers aren"t liable to step up to the plate a second time with another tax increase. They are most likely to nibble and tinker to find ways to fund an estimated $22 billion, two-year budget. The ideas with the best chance of passing will be cheap and, better yet, without controversy. Here are a few hints at what is in the pipe this time. Getting left behind The Black Legislative Caucus will try to buck the trend and propose a series of initiatives to close the achievement gap in Indiana. As a group, 64 percent of Indiana students passed the ISTEP test in 2002, but that number dropped to 38 percent for African-American students. In an Interim Study Commission, lawmakers looked at the problem and found the obvious: that students who have parental support, attend preschool and read at grade level by age 9 never fall behind. The state set high standards in 1999, under Public Law 221. The federal "No Child Left Behind" package set a 2012 deadline to reach state standards. Realizing the state"s finances, Rep. Greg Porter (D-Indianapolis) and Sen. Earline Rogers (D-Gary) will spend a lot of their legislative time warning lawmakers that they cannot reach the standards they have set without more money. They will attempt to sneak a few start-up programs in this budget. Part of the package includes a permanent commission to study the achievement gap, similar to the state Education Roundtable. The reality is that without a long, running start, some of the worst performing urban and rural schools have little hope of reaching the state standards. Plans could include $20 million to run pilot programs at the most struggling dozen schools. Gun laws Indiana allows a person to carry a concealed weapon at 18 years old, while the federal government sets the minimum age at 21 years old. A bill by Rep. Vernon Smith (D-Gary) would raise the age. Another gun control bill by Smith would end gun shows on county property and another bill would ban the sale of assault weapons. Bills involving any limit on gun ownership have traditionally died a quiet death in Indiana. "Lawmakers from rural areas who see guns as a sport or a collection don"t understand the violence and death they create in urban areas," Smith said. One positive sign, his bills have avoided their traditional killing ground in the House Agricultural Committee. Utility regulation Indiana was stung by the courts in 2001, when they ruled Indiana law did not give the Indiana Utility Regulatory Commission a say in the merger of SBC and Ameritech. Droves of angry customers, who saw service plummet after the merger, have not been enough to convince lawmakers to give the IURC that authority. The IURC has also asked for greater authority to impose fines. The new chairman of the powerful House Rules Committee, Rep. Scott Pelath (D-Michigan City), is again carrying legislation. The bills have died in the Republican controlled Senate. Others propose similar legislation in the House. There is some talk that the IURC has worked out a compromise with the state"s powerful utility lobby. Political reform A bill by Rep. David Crooks (D-Washington) would require lawmakers to wait a year before registering as lobbyists. Another one of his bills would require lobbyists to report gifts to lawmakers after spending $25, instead of the current $100 requirement. It would also shorten the reporting time. A bill by Rep. John Day (D-Indianapolis) would go further and eliminate gifts to lawmakers to cap dinners at $50 in a year. "The football tickets, everything would be gone," Day said. Indiana currently doesn"t limit gifts to members of the General Assembly, requiring only that lobbyists register and report gifts. Day"s bill would also cap campaign contributions by individuals and political action committees to $1,000 a year to a lawmaker and $2,000 to a statewide campaign. Corporations and businesses are already capped at $2,000 a year. Indiana politics gravitate toward the loosey-goose. Absent a major scandal, reforms are unlikely to get far. Predatory lending Rep. Bill Crawford (D-Indianapolis) worked with a coalition of mortgage brokers, civic activists and regulators to craft a bill to stop loans and refinancing packages by lenders who cannot justify the fees and penalties being charged. The targets are often seniors and inner city residents. "Some of these companies mine homes for the equity. The home"s value covers the loan, but it"s obvious that person does not have the income to cover the debt, so they lose everything," Crawford said. Privacy Federal law allows companies to exchange and sell personal information collected on everything from credit cards to car insurance. The federal law only requires the company holding the information to send you a one-time application to opt out of the information sharing. A bill by Rep. Duane Cheney (D-Portage) would turn the tables, requiring companies to ask your consent each time before they pass along your information to someone. This bill will be fun to watch, not because it"s likely to pass, but just to see which interest groups rise up to smother it. Gambling The horse racing industry wants pull-tab slot machines at the two Indiana tracks and at two off-track betting parlors in Indianapolis. Several Indianapolis lawmakers are interested in the tax revenue. French Lick wants the 11th casino license allowed under the 1993 riverboat gaming bill. The problem is that pull-tabs and a rural casino don"t make a blip in a $22 billion state budget. Indiana riverboats received dockside gaming last session in exchange for a tax increase. Many in the industry are not eager to push their luck and risk another tax increase, while the state is still in a financial crisis. If riverboats choose to not press their luck this session, it may be hard for other gaming issues, like pull-tabs, to pass on their own. Death penalty In 2000, opponents of the death penalty were given a hearing in the Senate, mainly because the popular Sen. Morris Mills (R-Indianapolis) was leaving. Time ran out on debate before the committee took a vote. Opponents of the death penalty aren"t expecting to get that far this session. Sen. Anita Bowser (D-Michigan City) will sponsor a bill to clean up the state"s death penalty law. It would require a person convicted of murder to automatically face life in prison without parole, if the jury cannot agree during the penalty phase of the trial. The bill is a response to a 2002 U.S. Supreme Court ruling that judges cannot override the decision of the jury in death penalty cases. -SW