Indiana Republicans Unveil Budget With More Money Allocated to Schools, Less Overall Spending

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INDIANAPOLIS -- Senate Republicans have unveiled their version of a new state budget, pumping more money into schools and spending a little less overall.

The House and Senate budgets give schools about the same one-percent increase in the first year of the two-year budget, but the Senate adds an extra 30-million dollars the second year, bumping a two-and-a-half-percent increase to nearly three-percent.

The Senate budget revives Governor Holcomb's plan to spend 400-million dollars to shore up teacher pension funds to free up money to do that. Senate Appropriations Chairman Ryan Mishler (R-Bremen) says the state has "cash, but not cash flow." He says Republicans won't use one-time money to fund an ongoing expenditure.

As Senate President Pro Tem Rod Bray (R-Martinsville) announced last week, the spending plan doesn't include the House's proposed cigarette tax increase. It keeps the House's 10-percent sales tax on e-liquids, but for prepackaged cartridges, the tax is 10 cents a milliliter, assessed at the wholesale level.

Mishler says it's important to achieve "parity" with tobacco taxes to send the message to teenagers that vaping isn't healthy. The Indiana Chamber, which has supported raising both taxes, charges the proposal fails to meet that goal, calling it "woefully inadequate" and worse than no tax at all.

Two of the four Democrats on the Appropriations Committee joined Republicans in sending the plan to the House floor. And even the other two call it a significant improvement over the House version. Gary Democrat Eddie Melton notes the bill scales back a House expansion of school vouchers, and gives legislators a voice in deciding how to spend money from President Biden's just-passed pandemic relief bill. The budget earmarks 900-million dollars of that money, and Mishler says he wants to include specific instructions for some of the two-billion remaining.

But Democrats say they're disappointed the bill doesn't include money specifically for teacher pay, even after the recommendations of a commission Holcomb appointed to suggest solutions. And they say it doesn't do enough to restore funding cut from state agencies when the pandemic capsized the economy last year.

The budget's never finalized till legislators get an updated economic forecast, expected next week. The pool of federal money adds another consideration. Mishler says Senate Republicans are close to agreement with the House, but not there yet.

The two budgets are only a half-billion dollars apart in total spending over the two years, with several one-time items appearing in both. Both plans set aside 50-million dollars for a new swine barn at the State Fairgrounds, a quarter-billion to expand broadband, and another quarter-billion to address the aftereffects of the pandemic. Both the House and Senate have called for an assistance fund for restaurants, a new 50-million-dollar local health grant fund, and 150-million for summer school to get students caught up on ground they lost when schools were closed or online-only.

And the Senate bill adds 100-million dollars in mental health spending to address issues worsened by the pandemic. Mishler says he'll talk with the Family and Social Services Administration about more specific directions for how that money should be spent.