Indiana Senate Submits Proposed Two-Year Budget

Posted by Isaac on

The Indiana Senate on Thursday put forth a 32.1 billion, two-year state budget which now must be reconciled with the House’s budget proposal. Several week ago, the Indiana House forwarded a $31.7 billion budget proposal sponsored by Republicans. At present Senate and House priorities are not in alignment. The House version was about 700 million more than the previous year’s budget. The Senate wishes to increase spending almost a half billion dollars more. How to fund the budget and the specifics of the spending, especially as it relates to education and taxes, will have to be worked out before the bill is sent to Republican Governor Eric Holcomb.

 

In regards to funding priorities, the Senate calls for higher spending for K-12 education and state colleges. The Senate would increase spending by $85 million for K-12 and $76 million more for state colleges than called for by the House. The Senate’s school funding also gives more to high-need students. It allots money to districts on a per student basis and lets schools spend money based on how they themselves rate teachers. The only place where the Senate spends less on K-12 education is that they omitted a House proposal for a one-time $500 per pupil grant given to schools that choose to consolidate.

 

The biggest difference between the two plans is expenditure on pre-kindergarten programs. The House proposed a $10 million expansion to the $437 million now spent on pre-K, while the Senate budgeted on three $3 million, plus an additional million for a new online pre-K program.

 

Whatever the two houses decide to spend, agreement must be reached as to funding measures for the budget. The House plan proposes a $1 per pack increase in the cigarette tax. This is part of House’s plan to double the sales tax on gasoline and dedicate the entire amount to fund the state’s transportation budget. The shift leaves just under a $300 million hole in the general fund, which will be filled by the cigarette tax. The Senate plan does not call for any cigarette tax increase, reserving such increase for a possible cut in Federal subsidies for Medicaid. The Senate plan would double the gasoline tax but use part of it to fund increase spending in the general budget.