Indiana lawmakers remain split over state budget-WEB ONLY

Indiana lawmakers on a legislative panel said yesterday they are confident they can reach a compromise on a new state budget, but key differences remain in plans backed by House Democrats and Senate Republicans.

A House-Senate conference committee discussed its proposals publicly, a week before the April 29 deadline for the legislative session to end.

“History is with us in reaching agreements,” House Ways and Means Chairman William Crawford (D-Indianapolis) said of the Democrat-led House and Republican-ruled Senate.

House Democrats said they still prefer passing only a one-year budget, which as proposed would spend about $14.5 billion. They said uncertainties over the recession and its impact on state revenues make it unwise to adopt a traditional two-year budget.

Senate Republicans want to pass a two-year budget, saying it will show that lawmakers are confident in their projected spending levels over a longer period. Their plan would spend about $28 billion over two years, plus another $2 billion in federal stimulus money.

More than $800 million of those federal dollars would be used to give slight spending increases to colleges and universities, and increases of about 2 percent for schools in each of the next two years. House Democrats don’t oppose spending the stimulus money on education, but they want more of it directed at schools with a high number of low-income students.

When House Democrats drafted their version of the budget, the federal stimulus package was still in flux in Congress. Their plan would increase spending on schools by 2 percent next year, in part by tapping $200 million in reserves.
But how money is doled out to schools is always a sticking point in budget negotiations between House Democrats and Senate Republicans.

House Democrats said their top two priorities are protecting education and creating jobs. One way to create jobs, they said, is spending money on building projects, primarily for universities.

The Senate Republican plan would authorize $220 million in new bonding authority for university projects, but House Democrats have proposed more than $700 million in bonding for new projects.

“Now, more than ever, we need to be aggressive in generating building projects,” said Rep. Scott Pelath (D-Michigan City).

A revised state fiscal forecast presented last week projected state tax collections to be about $830 million less through June 2011 than what a committee predicted in December, but leading lawmakers said the forecast was too optimistic.

Senate Appropriations Chairman Luke Kenley (R-Noblesville) has said the Senate Republican budget plan assumes the state will take in about $1 billion less through the end of the next two-year budget cycle than was projected in December, and he wants to stick to that number.

Rep. Jeff Espich of Uniondale, the fiscal leader for House Republicans, reiterated yesterday that he believed the new fiscal forecast was too rosy. Republican Gov. Mitch Daniels wants lawmakers to pass a balanced budget that preserves the state’s $1.3 billion surplus – something Senate Republicans say their plan will do.

But Espich suggested that lawmakers build up the surplus even more by holding the line on spending.

“Let’s not pass a budget that forces a tax increase. It’s a certain job killer,” he said.

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