Pension solution will clear the way for other budget matters, House majority leader says

June 17, 2015

Public pension reform is the first domino that needs to fall in the budget negotiations, House Majority Leader Dave Reed (R-Indiana) told attendees of the PHIA Legislative Breakfast this morning, and once it does, the other dominos will soon follow.

Reed explained that public pension obligations are the No. 1 cost driver for both the state and for school districts. He said the primary focus is pension fund stability over the long term rather than immediate relief.

However, he was not optimistic about the prospects of a solution to the raiding of the Motor License Fund. Currently, more than $700 million from that fund goes to support the State Police, approaching three-quarters of the State Police budget. While many would like to see that number reduced, Reed stated it would be nearly impossible to do so in a year in which they must address a $1.2 billion structural deficit. He agreed that the problem should be addressed in a gradual fashion in coming years.

Other items that could be included in the budget negotiations are modernization of the state liquor system and property tax reform. Outside of the budget process but still in this legislative session, Reed discussed the strong likelihood of adjusting the criteria for unemployment eligibility for seasonal employees, including construction workers.

“We in the highway industry are pleased to see progress being made in the state budget, as well as on issues that affect highway construction, such as unemployment compensation,” PHIA Managing Director Jason Wagner said. “We also hope to see the Motor License Fund problem addressed sooner rather than later, as we’ve seen more money siphoned away from highway projects each year.”


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