Budgets and More Budgets

In 2008 the Governor and State Legislature began the process of restricting the growth of local community budgets by instituting HEA 1001 with property tax caps of 1, 2, and 3% by 2010. This began a frenzy of budget cuts by 2,300 local municipal organizations. Only two filed with the State for Distressed Unit Assistance, Gary and a library in Beech Grove. Next year may feature more filings, but in short these caps are here to stay.

Then last month the Governor announced that he would be pushing for $1 billion in budget cuts from the state budget in anticipation of lower sales tax and income tax revenues during the completion of this recession. Some groups are demanding that the State use it's $1.6 billion in rainy day funds, but my money says Mitch will hold firm and keep that reserve for a worse event in the future.

Lastly, now the Obama administration will blow it's way through a couple trillion more in "stimulus" funds to try and jump start the economy. But eventually, probably in mid-2010 they will have to deal with the deficit again. This may well become "the" central and core election issue for the mid-term elections. Can anyone show deficit leadership, budget cutting, collaboration across the aisle in such a way to tackle the tougher budget items?

Mayor Costas and others in NW Indiana are hoping that earmarks will remain an option. Gotta say from my perspective, they are political hot potatoes right now, and will probably be banned for good once this recession is over.

Pete Visclosky (D - 1st District) is still against the bank bailout, question is where will he fall on the Stimulus Plan?

My take? All these budgets are going to have to be cut, and the stimulus plans are going to fall woefully short of expected impact. Best bet is to do everything possible to gain a Housing Recovery in 2009. Of course, for full disclosure, I'm working on a book project right now about that subject ... more in future weeks.