Indiana's budget picture is slowly taking shape, but the big questions about tax collections, tax cuts and how much will be spent on education remain to be seen.

Members of the State Budget Committee spent a second day Wednesday hearing from the State Budget Agency about how state department heads crafted their biennial budget requests and from the department chiefs themselves on what they would need over the next two years.

Lawmakers expect to get an updated tax collection forecast next month and another in April, shortly before they wrap up their legislative session, that should tell them how much money they have to work with. Legislators will also wait to see what priorities Gov.-elect Mike Pence spends on in his first budget, including a proposal to cut the state's personal income tax.

This week's meetings gave lawmakers an opportunity to talk with state agency leaders, but the hard questions are likely to come later, after the legislative session begins and once an actual budget has been submitted for consideration. Members of the budget committee also pointed out that the agencies make up very little of the state's overall spending picture.

"The general services of state government are a small portion of the state budget. The lion's share is still K-12, higher education, Medicaid and the social services," House Ways and Means Committee Chairman Tim Brown, Crawfordsville Republican, said Wednesday. "I think it's just a starting a point, so we'll go forward and see how April and December look."

Gov. Mitch Daniels spent the last week touting the $111 each taxpayer would receive via his automatic tax refund and has talked broadly about the state's fiscal footing as he prepares to leave office. The state has roughly $2 billion in cash reserves and an estimated $500 million surplus heading into 2013.

But legislative leaders have urged caution, including Republican House Speaker Brian Bosma and Senate Appropriations Chairman Luke Kenley, a Noblesville Republican.

The State Budget Agency ordered most other departments to work up "baseline" proposals that amounted to roughly 3 percent less than what lawmakers afforded them last year. In many cases, the agency heads offered a broadly positive picture with a handful of requests for increased spending.

Department of Corrections leaders pointed out a striking drop-off in the number of prisoners it was housing, even as it asked for $27 million more in spending. Daniels and some lawmakers had tried to reduce prison crowding through legislation, but were unsuccessful.

"Obviously legislation did not go through, but we saw a massive change in behavior, there's no other explanation for what you see here," Budget Director Adam Horst said. "The biggest driver of the DOC budget is how many heads they are housing. Period."

Andrew Pritchard, DOC chief financial officer, later noted that the state is locked into a handful of contracts that automatically increase based on changes in the consumer price index.

Rep. Sheila Klinker, Lafayett Democrat, pressed him on where they could save money.

"Have we thought about going back to our prisoners serving the food, cooking it, working it, paying them a little bit?" Klinker asked. "You're not going to get an increase, we're surely not going to pay them that much more to work there."

Pritchard pointed out that the balance of work between prisoners and contractors has not changed and that much of the cost is based on increased food prices.