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The Journal Gazette

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Friday, January 11, 2019 1:00 am

General Assembly

Holcomb unveils his 2-year state budget plan

Fully funds child welfare; schools get small increase

NIKI KELLY | The Journal Gazette

Budget highlights

• Ends the $3 million state subsidy for the Hoosier State Train from Indianapolis to Chicago

• Exempts military pension from the state income tax

• Gives state colleges and universities a 1 percent increase each year

• Redeploys existing workforce development dollars on programs, with up to $7 million in new money

• $12 million for a new police lab and post in Evansville

• $150 million for various repairs and renovation to state facilities

• Sets school safety grant funding at $14 million each year

• Fully funds DCS and Medicaid needs

• $10 million for voter system upgrades

 

INDIANAPOLIS – Schools would get a modest inflationary increase under a budget proposed by Gov. Eric Holcomb's administration Thursday even though educators and Republicans are calling for significant teacher pay increases.

The new education dollars – about 2 percent a year or $289 million over the biennium – would flow through the K-12 school funding formula to individual districts. Those districts would then decide how the money is spent.

Democrats quickly said there is no money in the budget targeted to teacher salaries.

“Governor Holcomb's budget doesn't earmark even one dime specifically for teacher pay raises. IOUs and empty promises won't cut it for hardworking teachers,” Indiana Democratic Party Chairman John Zody said. “Budgets are about priorities. That Holcomb failed to include a teacher pay raise or significantly expand preschool sure looks like a governor without a serious plan.” 

Micah Vincent, head of the Indiana Office of Management and Budget, said he shares the concerns “with the decisions that are made locally on teacher pay. At the same time we also recognize the function of the local governing body to do that.”

He said the discussion of how to improve teacher salaries will continue throughout the session.

Holcomb's $33.8 billion, two-year spending plan also would fully fund requests for the Indiana Department of Child Services; cover increased Medicaid costs; maintain school safety funds and leave a healthy surplus of at least $1.8 billion.

“The state budget proposal the governor announced today is a great starting place for our budget discussions – it is balanced, protects reserves and represents a fair and accurate picture of the revenue available in the next two years,” said Senate Appropriations Chairman Ryan Mishler, R-Bremen. “I look forward to a robust discussion with the governor and our colleagues in the House as we move forward with writing a budget that will make a positive impact on the Hoosier State.”

The proposed budget does more than many might have expected after a December revenue forecast.

When the forecast came out, key Republicans said the state would have about $828 million in new revenue over the two years with much of that going to DCS and Medicaid.

But those estimates didn't take into account the current fiscal year revenues being revised upward – changing the base of revenue lawmakers have to spend for the future.

No one corrected that calculation error until now.

It means that lawmakers have more than $1 billion in new money to spend on priorities over the biennium – giving them more wiggle room than originally thought.

Democrats continued to be irked that Holcomb renegotiated the Indiana Toll Road lease for $1 billion in new revenue without legislative involvement.

Of that amount, $700 million in payments are expected in the next two years and aren't reflected in the budget. Vincent said that's because it was never appropriated and instead went directly to transportation accounts.

“We can always appropriate it too,” Mishler said, alluding to the fact that lawmakers can ultimately take the money and use it for other things.

nkelly@jg.net