A Citizen's Guide to Indiana

Morton Marcus has a fun (in a grim sort of way) column in the Northwest Indiana Times. Those links go stale pretty fast, so even if it’s dead tomorrow, it was good today. Anyway, he writes about fictitious Sid Simpleton, the state’s social policy director, who has a no nonsense, focus on the bottom line, non-bleeding heart way of reducing the state’s health costs.

“[S]ome of us who think about policy are thinking the unthinkable. We don’t have any support from the governor on this, but we see ourselves as the advance phalanx of progress for Indiana’s prosperity.”

“What do you have in mind?” I asked.

“Ship out the old people,” Sid said. “People 65 and older account for about three-quarters of the state’s deaths. Everyone knows the bulk of health expenses are spent in the last weeks of life. We need to get those likely to be dying out of Indiana.”

“Market incentives,” Sid smiled, sipping on another drink. “First, we would make mailing lists of poor and sick Hoosiers available to retirement colonies outside Indiana.

“Second, we offer a Sunshine Subsidy, a flat payment to anyone 65 and older who volunteers to leave Indiana and not come back. Third, there is the Loved-one Lottery. This is open to out-of-state relatives of older Hoosiers. The winners get money to maintain their relatives somewhere else.”

“But retired people,” I objected, “have all that pension money we would be giving up while they are healthy.”

“Pensions,” Sid sighed, “are things of the past. A good bear market and 401(k) accounts will be paupers’ portfolios. But health care costs are going to go up.”

Matt Tully has a column looking into what effect Daniels will have on the November election. The Democrats main themes going into November will probably be along the lines of: “Daniels is selling off Indiana and he doesn’t care what you think about it,” trying to hammer home the idea that Gov. Daniels has a privatization fetish and doesn’t really like to listen to dissenting opinion.

The Republicans’ response? “Democrats are the party of ‘no,’ in fact, it’s an angry ‘no.'” Angry about selling out the State? Heaven forefend. They should really back off so as not to bruise Speaker Bosma’s delicate sensibilities.

More seriously, with the Republicans firmly in control of the Governor’s office and the Senate through at least 2008, the most useful function the Democrats can serve is as a brake against any bad ideas the Republicans might have. I’m sure Speaker Bosma would criticize the brakes on a vehicle, “all they do is stop; sometimes they even squeal, it would be best if we just disconnected them altogether.”

The Indiana Law Blog has posted (pdf – long) the Plaintiff’s Toll Road Brief to the Supreme Court. The ILB post here.

Hopefully I’ll be able to read the brief later.

Update

The Plaintiffs’ brief alleges the following errors on the part of the trial court:
1) Concluding that the Indiana Finance Authority is a “municipal corporation;”

2) Concluding that the Public Lawsuit Statute applies to the disposition of a public approvement as well as its acquisition;

3) Concluding that there was insufficient evidence that the population parameters which applied only to 7 specific counties were unconstitutional special legislation.

4) Concluding that there was no substantial question as to whether HEA 1008-2006 contravened Art. 10, sec. 2 requiring that revenues derived from net annual income of any public works belonging to the state be applied to the Public Debt because the Toll Road is titled in the name of the state, the transaction generates revenues from the net annual income (“rent”) of the Toll Road, and Art 10, sec. 2 restricts the disposition of such revenues whether the recipient is the State or the IFA and because there exists Public Debt.

Some analysis:
As good as the argument sounds based purely on the terminology, I think the Plaintiffs probably lose on the issue of whether the IFA is a “municipal corporation,” because contrary to a common sense understanding of “municipal,” when you strip down IC 34-6-2-124(a)(1)(B) to its essential elements, it defines a municipal corporation as “a public instrumentality or public corporate body created by state law” and I think the IFA probably is a public instrumentality or corporate body. They cite authority suggesting that the specific items listed afterward serve to limit the general definition above. My understanding was that was not the case, but I’m not terribly interested in doing independent research just now.

The Plaintiffs argue that the money provided to the toll road counties is impermissible special legislation. Even if the rest of HEA 1008-2006 may benefit the State generally, there are specific provisions of the statute that dole out pork to those counties specifically. The trial court found justification for special legislation in that the citizens of toll road counties face potential (it should have said “certain”) rate increases and traffic diverted onto local roads. However, the Plaintiffs argue, this does not justify the special legislation because the monies given to the Toll Road counties are not rationally related to, nor do they serve the purpose for which they are ostensibly given – to cope with the diversion of traffic from the Toll Road. In addition, under the Supreme Court’s Kimsey decision, even where a law is reasonably related to inherent characteristics of specified localities, the second part of the test is whether the law applies wherever those characteristics exist. Here they do not. The IFA has conceded that drivers may use alternate routes such as US 30, but the special legislation wasn’t designed such that it applied to the US 30 counties.

The Article 10, sec. 2 argument concerns whether the Toll Road is a public work belonging to the State from which net annual income is derived such that it must be applied to the Public Debt. The Plaintiffs’ brief argues:

The framers of the 1851 Constitution, shaken as they were by the State’s earlier financial collapse as a result of major canal and road-building projects, carefully crafted a Constitution so as to ensure that such a catastrophe would not happen again. In upholding ‘Major Moves,’ the trial court disregarded the framers’ clear intent. For example, it ignored the indisputable fact that the Toll Road “belongs” to the State, misread the Constitution as applying only to revenues received by the State (where the provision applies without regard to the recipeitn), and ignored the framers’ careful distinction between “State Debt” and “Public Debt,” conflating the two terms and thereby impermissibly treating the term “Public Debt” as meaningless surplusage.

The Plaintiffs state that there is ample evidence of public debt, including the IFA’s own “State Debt Table” documenting mroe than $2 billion in formally denominated debt administered by the IFA; more than $8 billion in pension liabilities; and substantial municipal debt. They go on to argue, “Under the plain language of Article X, sec. 2, the proceeds of the Toll Road transaction must be used to pay public debt regardless of whether that transaction is viewed as a lease or a sale.”

Article 10, section 2 states:

Section 2. All the revenues derived from the sale of any of the public works belonging to the State, and from the net annual income thereof, and any surplus that may, at any time, remain in the Treasury, derived from taxation for general State purposes, after the payment of the ordinary expenses of the government, and of the interest on bonds of the State, other than Bank bonds; shall be annually applied, under the direction of the General Assembly, to the payment of the principal of the Public Debt.

Interesting. The Plaintiffs are arguing that the “thereof” does not refer back to the word “sale” but rather refers back to the phrase “public works.” So, it’s not the net annual income from a sale of public works that triggers the Constitutional requirement. Rather it’s all revenues derived from the net annual income of the public work. Therefore, because the State is getting the $3.8 billion from an assignment of the revenues from the Toll Road, the argument goes, the Constitutional provision is implicated.

In addition to that, I still say that the Constitutional provision was designed to dictate how the State was required allocate funds realized from selling its interests in a public work, whether the interest sold was a fee simple absolute or some lesser interest in the property such as leasehold for a term of years. The arguments of my detractors suggest that in order to accomplish this, our framers would have had to specify “sale, lease, rent, give, loan, bequeath, bestow, cede, confer, consign, convey, deliver, dispose of, donate, entrust, grant, present, relinquish, transfer, transmit” or any of the other myriad ways in which such a transfer of rights for money can take place. But if Constitutions had to be written in such a way, they would look like bond documents.