They will take the latest proposals to their caucuses in the next few hours.  Bauer says the 2010 General Assembly could “possibly” end today.  Neither side would go into detail about agreements but both indicated that only minor issues remain unresolved.

There is no progress being reported but also no apparent animosity.

On that front, Bauer lunched yesterday with Senate President Pro Tem David Long and both appeared cheerful when returning seperately to the Statehouse.

Here are some positive indicators I observed this morning:

-GOP Sen. Luke Kenley and GOP Sen. Brandt Hershman entering Democratic House Speaker Pat Bauer’s office for private talks.

-Governor Mitch Daniels leaving the building for an economic development announcement.

-Lots of lobbyists out of the loop.

Meantime, House Minority Leader Brian Bosma just informed fellow members of the need to return to a private caucus.

Bill Sheldrake says that describes his new assignment to help draft an accurate forecast of state tax revenues.  The Republican Sheldrake and Democrat John Grew are new additions to the technical committee that will draft the forecast at the request of the State Budget committee.  They are former members of the committee who still follow the budget process.

The approval came after a sharp exchange between GOP Senator Luke Kenley and Budget Director Chris Ruhl.  Kenley interrupted a Ruhl power point presentation to demand agreement that the Daniels administration will live by the numbers in a new forecast.   Ruhl agreed.

Now, if that sounds like a big bill, consider that the budget may be the only place to put a plan to solve the deficit in the Unemployment Insurance Trust fund.  Republicans say they want a separate bill but don’t know if there is one available, since the House killed its proposal.  (They also said the unemployment issue could lead to a special session.)

Sen. Luke Kenley suggested that stimulus money could be used to avoid higher ed cuts while saying that he plans to follow the governor’s budget outline. 

The legislature basically starts from scratch next week.

 They are talks that have the Statehouse hallways buzzing over the possibility of an Indianapolis casino.

Sen. Luke Kenley says a downtown gambling parlor just won’t happen.  Deals made to start casinos in Anderson, Shelbyville, and French Lick prohibit the move, according to Kenley.  Democrats say that the denial of a casino when then-Mayor Bart Peterson suggested it is a problem for them.

No one yet has an answer that works.

Sen. Luke Kenley wants taxpayers to know that the $1.3 billion dollar state surplus is not all in a Rainy Day Fund.  The suggestion is that some of it is not available to help solve budget problems.  Kenley blames the media, in part, for the perception that it is. 

Here’s the deal:  Some of the money is in a tuition reserve fund and some is in a medicaid reserve fund.  Only about $400 million is actually in a fund labeled “Rainy Day Fund.”  Does it matter? 

Consider this:  there was a time when all of the state surplus went into an account labeled “Rainy Day Fund” and the new reserve accounts were created simply to protect that money.  All of the funds could easily be renamed in a new budget, and made available if lawmakers and the governor so choose.

Plus, if there is a perception problem, it may be due to all those campaign commercials Mitch Daniels aired touting the size of the surplus.  I guess the media did run them.

For his part, the governor today said that he considers all of the money to be part of the surplus and doesn’t think any of it should be spent.

Brandt Hershman gets Kenley’s old post at Tax and Fiscal Policy.

That puts Kenley in charge of the new state budget.

He said “safety nets” are also a sticking point, indicating that the real issue is more money for schools and local governments.