INDIANAPOLIS – A government shutdown beginning Wednesday could have far-reaching effects:

• State parks could be closed over the Fourth of July weekend.
• Property tax bills could be further stalled with the shutdown of state agencies.
• Hoosiers could be stuck with expired driver’s licenses or plates.

"When I think about the possibility of failure ... I have to think about the shame that would be on us collectively," Rep. Jeff Espich, R-Uniondale, said. "I don’t want to be the next legislature that fails to pass a budget. People would have a right to be angry."

Lawmakers have been working on a new state budget for the past six months. After they failed to come to agreement in the regular legislative session, Gov. Mitch Daniels called the General Assembly back in special session.

The current budget expires Tuesday, giving lawmakers just five days to reach a compromise.

Only four times in the state’s history has the legislature failed to pass a budget, according to the Legislative Services Agency. One was in 1863 when Gov. Oliver Morton ran the state on donations he obtained. The General Assembly also did not pass a budget in 1857, 1871 and 1887.

Lt. Gov. Becky Skillman visited Fort Wayne on Thursday to push for lawmakers to approve a reasonable budget, but she also said the administration is trying to determine what happens if one isn’t passed.

She would not specify what services or state offices might have to shut down, saying it is "very murky" and "it’s not an easy answer."

Skillman also acknowledged there is significant apprehension among state employees about what a government shutdown would mean and that she hopes legislators won’t let that happen.

Michael Wartell, Indiana University-Purdue University Fort Wayne chancellor, attended Skillman’s news conference on campus and said he was unsure whether the university could remain open after Wednesday without a budget.

The non-partisan Legislative Services Agency put together a memo in mid-June that said Indiana is one of 20 shutdown states in the nation and indicated Daniels would have no legal authority to continue day-to-day operations.

"A state government shutdown presents the immediate question of how to mitigate the resulting hardships and frustrations that will result from a shutdown in the 21st century," the memo said. "The executive, judicial and legislative departments provide a vast array of services to businesses and individuals each day.

"Nearly all these services will likely come to a halt on July 1, 2009, if there is no budget by that date."

The basis of the memo is the Indiana Constitution, which says "no money shall be drawn from the Treasury, but in pursuance of appropriations made by law."

The state budget is the appropriating document for the state. Without it, there is no legal basis to pay state employees in the legislative, judicial and executive branches, according to the memo. Local courts might also be affected because the state pays the salaries or judges and prosecutors.

There is one law on the books that would allow the state to keep open all psychiatric hospitals, the Indiana School for the Deaf, the Indiana School for the Blind and Visually Impaired, the Indiana Veterans Home and the Plainfield Juvenile Correctional Facility.

But it does not specify other state prisons, agencies and general operations.

The same memo theorizes that Daniels or the state treasurer could seek judicial review for spending on public safety and health needs. But the memo said the existing state law allowing for a small number of institutions to continue running might work against state officials.

"The court could find that … the General Assembly has in fact addressed the possibility of a failure to enact a budget and … it provides for no other purpose."

Rep. Win Moses, D-Fort Wayne, said he was a freshman legislator in 1993 when lawmakers took until June 30 to finalize a budget.

"All legislators understand the dire consequences," he said. "I have no doubt (Daniels) will shut down some agencies and stand in front of them saying ‘it’s not my fault’ with a big sign."

Moses said the differences between the sides in 1993 were smaller compared to the philosophic gaps on school funding holding up the budget now.

"It was far less personal then, too," Moses said. "The governor is making it personal."

Benjamin Lanka of The Journal Gazette contributed to this story.

nkelly@jg.net