Scott Tibbs
Published by the Hoosier Project, 07-23-2001

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Misuse of Build Indiana Fund continues

Governor Frank O'Bannon has issued new guidelines for the Build Indiana Fund in light of the expose' on the abuses of the fund reported in the Indianapolis Star. Part of O'Bannon's "reform" is that not-for-profit agencies now must apply for BIF money through a government agency, instead of directly. The guidelines aren't "new" at all, but simply a restatement of existing law.

Predictably, this has led to criticism from some legislators who want to continue spending money in whatever way they desire, without being constrained to the laws they wrote governing the fund. House Floor Leader Mark Kruzan has argued that the state budget has the force of law, and therefore O'Bannon's changes are not needed and there was no violation of law. But the Star reported on July 8 that experts have disputed this assertion. Bill Styring of the Hudson Institute noted that the state budget is a temporary law that expires after two years, saying, "I would be very nervous relying on the budget bill to overrule a regular statute". The Indiana Civil Liberties Union has raised a similar objection. In response to statements like Kruzan's, ICLU attorney Ken Falk said, "the legislature wants to start spending money without laws."

Both the ICLU and the Hudson Institute are right. Kruzan's viewpoint, if carried to its logical conclusion, would exempt the state budget from all preceding laws, leaving absolutely no restrictions not only on what the state may not spend money on, but on what the state is obligated to spend money on. Conceivably, any financial obligation the state has committed to can be ignored if the legislature decides they don't have the funds to spend on it during the budgetary process, which means everything from police pensions to education funding is now hanging by the thread of the legislature's goodwill.

There is another question that must be asked in response to the silly "budget-is-law" argument. Why should we even have legislative guidelines on how the state spends money if the budget overrides those laws every two years? If the viewpoint of Kruzan and others is upheld, the only restrictions on the Indiana budget would be those imbedded in the Indiana Constitution, because the legislature would not be bound by any laws whatsoever.

Of course, O'Bannon's ruling will make it more difficult for not-for-profit agencies to receive BIF money, and Kruzan said that "I know in some parts of the state we'll now have these not-for-profits beholden to politicians on who gets sponsorships and who doesn't." But the bottom line is that whatever one thinks about whether or not O'Bannon's "new" guidelines are good policy, the guidelines simply require the state legislature to hold to the letter of the law. This fact has not gone unnoticed by BIF critics, including Sen. Luke Kenley, R-Noblesville. Kenley asked, "why didn't we just follow the law in the first place?"

One can understand why our legislators want to simply distribute this money willy-nilly without worrying about things like whether or not it complies with state law. The BIF is really one big pork-barrel project, which legislators use to buy votes and look good politically to their constituents. Further restrictions (or in reality, simply making them follow the law) would hamper their ability to play politics with the people's money.

Others have accused O'Bannon of changing the rules in the middle of the game. O'Bannon's "new" administrative guidelines may change the way the system will operate from they way it has in the past, but the change does not "change the rules" at all. Instead, the "new" guidelines force the legislature to operate within the letter of the law. If forcing not-for-profits to apply for money through a government sponsor is bad policy, then the legislature should move to CHANGE the law, as they did in 1999. But just because our elected representatives consider something to be bad policy does not mean they can simply ignore the law and do whatever they want.

While O'Bannon's move may somewhat insulate him politically form the irresponsibility of the legislature, he cannot escape responsibility in this scandal. On the breach of law the legislature perpetrated with previous BIF expenditures, O'Bannon passed the buck, saying that his office merely distributes the funds, and is not responsible for the violation of law. But O'Bannon cannot escape his responsibility that easily. As Governor, O'Bannon is the highest elected official in the State of Indiana, and should wield his power with responsibility, endeavoring to make sure the state legislature acts within its legal and constitutional limits. O'Bannon's action also does not shield him from the reality that had state government not got caught with both hands and both feet in the cookie jar, the BIF grants would have continued merrily along in violation of the very law that created it. Does anyone really think O'Bannon would have taken this action if not for the political heat this scandal generated?

O'Bannon's shirking the responsibility he should be taking makes one long for a leader like President Truman, who had a sign on his desk saying "the buck stops here". Instead, O'Bannon is imitating disgraced ex-President Clinton, saying, "the buck never got here!" This is not the type of "leadership" that Hoosiers want and need, and we should be outraged that Indiana's highest elected official refuses to take responsibility for how state government acted outside the law.