Wed, Jun 12, 2002 (9:40 a.m.)

INDIANAPOLIS -- Republicans on the Senate Finance Committee plan to strip all provisions that would expand legalized gambling from a Democrat-drafted tax-and-budget bill passed by the House last week.

Senate Finance Chairman Larry Borst, R-Greenwood, said Tuesday that his committee would remove language that would allow riverboat casinos to remain permanently docked, authorize a casino in Orange County and allow slot-like machines at horse racing venues in central Indiana.

He said he was unsure whether the full Senate would vote to restore the gambling expansion language next week. The Senate, which Republicans control 32-18, narrowly approved similar provisions earlier this year. But the legislation died on the last night of the regular session March 14.

Borst said gambling-related provisions passed by the House last week would direct about $400 million a year to the state's primary checking account and make it dependent on gambling money.

"I would like to go along, so that if every riverboat somehow sunk and we were growing corn and beans on every (horse) race track, the state of Indiana wouldn't suffer at all," Borst said.

"If we take some of these new suggestions, then you are starting to build it (gambling money) in the general fund, and you're going to start depending on it and you're going to be more and more dependent on it," Borst said. "I don't want to see that happen."

Borst said he also objected to gambling proponents using the state's fiscal crisis as an opportunity to expand gambling in Indiana.

"What the gamers are trying to do here is revamp a whole bunch of stuff that ought to stand on its own, and to put it in a budget thing in a time of crisis is a back door. It's kind of a wimpy way to do it," Borst said. "They ought to have a bill in the regular session."

Borst's comments came after his committee heard more than three hours of testimony on what should be done to plug the budget deficit and restructure taxes.

First to testify was House Ways and Means Chairman B. Patrick Bauer, D-South Bend, who drafted the tax plan that barely passed the House last week.

Bauer's plan would direct about $3 billion in new tax revenue, including that from expanded gambling and higher taxes on casinos, to the state budget. It would cut property taxes and other taxes by about $1.8 billion over the same period.

"People say this gives too much money to the budget -- it doesn't give enough," Bauer said.

He said his plan would still leave the state's finances in precarious shape by the end of fiscal year 2005, and urged senators not to make changes the House could never pass.

Borst said his committee would not completely dismantle the House bill. But he said the panel likely would include an individual income tax increase, retain budget cuts made by the governor, and do more to promote economic development, in part by eliminating the corporate gross income tax.

If the Senate approves a plan next Tuesday, it would give the House and Senate four days to pass a compromise by the special session deadline of June 22. Borst said it would be up to the governor to say which plan he liked.

O'Bannon already has said he would call lawmakers back for a second special session if they fail to pass a comprehensive plan on time.

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