INDIANAPOLIS – Gov. Mitch Daniels declined to call lawmakers back to work immediately Thursday to craft a new state budget, instead waiting until the smoke clears to set a date for a special session.

“When I think they’re ready to face reality, not write a budget based on fiction but on the unfortunate reality that they didn’t cause but we have a duty to face up to, then we won’t hesitate,” he said.

But that doesn’t mean work couldn’t begin quickly, said Senate President Pro Tem David Long, R-Fort Wayne.

Long suggested Daniels craft a full budget with up-to-date actual revenue numbers – and a complete school-funding formula – and submit it to the bipartisan State Budget Committee in the next few weeks. The budget could then be reviewed, Long said, and discussed in public hearings.

Long also said Daniels should wait until there is an agreement among all four caucuses on a budget and then call lawmakers back for one day to approve the compromise.

“The finger-pointing really is useless at this point. It isn’t going to get us anywhere,” he said. “People can blame each other and be outraged or whatever you want to call it, but the fact is we are in this situation because of the worst economic situation since the Great Depression. That has caused our problem today.”

Indiana’s current state budget expires at the end of the fiscal year June 30.

Legislators worked for four months on a new two-year spending plan, but in the last day squabbled over whether Daniels would accept a budget with $100 million in additional cuts and $1.4 billion in reserves.

In the end, a budget that came close to those parameters failed in the House, with all Republicans voting against it, along with half of the Democrats.

As the post-mortem hit full stride Thursday, it became clear that it wasn’t so much those numbers that caused the disconnect as it was the starting point.

Legislators were using the most recent tax revenue forecast, but Daniels said those projections were too optimistic, and the state already missed them by $200 million in April alone.

So, according to Daniels, using that forecast to get to a $1.35 billion surplus is disingenuous if the revenue number is already factually inaccurate.

“Regrettably, this budget was utterly unacceptable all along, never had any other point of view, and it’s a good thing that it failed, because we have plenty of time now to deal with reality and to take the kind of measures one takes when one’s revenue and income are dropping,” Daniels said. “One doesn’t behave as nothing is different. The legislature, I’m sorry to say, was behaving as if nothing was different, but everything is different.”

Waiting until the beginning of June would give lawmakers at least one more month of revenue data to work with, and mid-June is the time frame being bandied about at the Statehouse for the special session.

But House Republican Leader Brian Bosma disagreed with Long, saying it isn’t the governor’s responsibility to come forward with a new plan. And he said he does not support suspending constitutional rules to have a one-day session.

And House Speaker Pat Bauer, D-South Bend, urged Daniels to show more initiative this time around.

“I think he’s just going to have to realize that he has to be part of the solution and not the problem,” Bauer said.

Soon after the clock struck midnight Wednesday, the work shifted from the budget to blame. And leadership from all sides took a few swings Thursday.

The following summarizes some of those criticisms, explaining how Daniels and each legislative caucus – except the Senate Democrats – faulted others for the breakdown.

Senate Republicans

They gave too much in the budget negotiation with House Democrats, ultimately agreeing to spend far too much money during an economic recession.

Daniels said he was “baffled” by the budget that the majority caucus agreed to – calling it “utterly unacceptable.”

But Long defended the budget while also conceding he would have voted to sustain a Daniels veto if it had gotten that far.

House Democrats

They agreed to a budget but could get only half their caucus to vote for it – a failure of leadership from the majority party.

“That was a negotiated product between the House and the Senate. It was one that Sen. Luke Kenley informed me that he felt the Democrats would vote for because it had most of what they wanted in it,” Bosma said. “Obviously that wasn’t the case here, and Republicans were not going vote for a budget that set us up for a tax increase in two years. House Republicans I should say.”

House Republicans

They refused to give even one vote to the bipartisan compromise – instead staking out their position on reduced spending while insisting on a new $5 million scholarship tax credit for private schools.

“We knew that they would say no to everything. If you don’t know who I’m talking about, I’m talking about the minority in the House,” Bauer said. “They were ‘no’ all the way through on any budget. … I know what you’re saying, you’re saying it to yourselves, ‘that’s the caucus of no over there.’ ”

Daniels

He wasn’t clear or assertive enough.

Much of Thursday’s discussion revolved around what exactly the governor would accept in a budget and what he wouldn’t. Although Bosma said he was absolutely clear on Daniels’ parameters, he appeared to be the only one.

Bauer said the goalposts moved numerous times during the day, and he said Daniels specifically said he would sign the final budget compromise but then ended up lobbying against it.

Long defended the governor, saying he never broke his word. But he also conceded there was a lot of confusion.

“I’ll be honest with you. I think it’s subject to interpretation about how clear people were,” Long said. “The actual number the governor could sign is in the eye of the beholder in my opinion. It was not, ‘If you give me this specific thing I can sign it.’ But it was close to that.”

So will Daniels change his tactics?

“Perhaps I should have been more directive. Perhaps I should have been harsher. Perhaps I should have been more critical of their plans as they moved forward,” Daniels said. “I tried for an approach that was more collaborative and cooperative.

“(It) didn’t work.”

nkelly@jg.net