Higher-education leaders in Indiana got an early taste Thursday of what will likely be a tough predicament for anyone relying on state aid when lawmakers return in January to write the budget.

Indiana University President Michael McRobbie told members of the State Budget Committee that his institution has grown into a lean operation over the last four years. Vincennes University President Dick Helton asked the panel for $8 million to run a vocational training program but was met with skepticism.

Senate Appropriations Chairman Luke Kenley, a Noblesville Republican who will lead the budget drafting next year, told the group that state tax collections are unlikely to improve much next year and the strain on the budget could be great.

"There's sort of an element, or a sense that people have waited long enough and there are some things that they think it's time we have to do this or it's time we have to do that," Kenley said. "There is going to be an enormous amount of competition for whatever funds are out there."

Gov.-elect Mike Pence and the General Assembly will head into the 2013 session with roughly $2 billion in cash reserves collected through budget cuts made by outgoing Gov. Mitch Daniels, improved tax collections and federal stimulus aid that carried the state through the recession.

Pence campaigned on a proposal to cut the state's personal income tax by 10 percent and maintain the state's cash reserves at an amount equal to 12.5 percent of state spending. But House leaders have urged caution on approving new tax cuts, noting that the Legislature already has cut the corporate income tax and is phasing out the inheritance tax.

Kenley noted that tax collections could grow by 1.5 percent in the coming budget cycle, giving lawmakers little to work with in terms of new spending or restored funding.

"So it's going to be a tough session in that regard," he said. "We've kind of all approached this with a partnership approach over the last four to five years. I think we need to stick with it, I don't think we're out of the woods."

The pinch for Indiana universities has been pronounced with a request from the Commission for Higher Education and lawmakers that they not shift the burden to students through increased tuition costs.

McRobbie told the panel Thursday that his university, like every other one, has done less with more.

"IU is both educating more students and producing more degrees with reduced staffing and with fewer state funds," he said. "These efficiencies and productivity gains have not been easy, as you're well aware. But I often remind my colleagues that no one has had it easy in this state — and most other states, too — during the recent period of economic difficulty."

Helton, the Vincennes president, asked the panel for $8 million to pay for equipment at a vocational training center which would help high school students graduate with associate's degrees, positioning them better to find work out of school.

"We're going to enhance an opportunity because these students will have better opportunities to get a degree," he said.

Kenley grilled him on the details of how the state money would be spent before pointing out programs will need strong justifications to win money from the state.

"It's not like you're going to be opening some new ice cream stand on the corner and business will just show up," Kenley said. "There's got to be some reason for why we're going to do this."