Senate panel advances budget, but Kenley warns cuts may be coming

April 9, 2015

Indiana Senate Republicans revealed a two-year, $31.5 billion budget Thursday that boosts funding for schools, universities and highways and leaves the state with nearly $1.9 billion in the bank.

But the plan’s architect warned immediately that lower-than-expected tax receipts mean the budget may need cuts before it ever becomes law.

“The economy has not performed as we hoped it would,” said Senate Appropriations Chairman Luke Kenley, R-Noblesville. “The odds are we might have to do some downward revisions in order to live within our means.”

Lawmakers will find out more next week when they hear an updated fiscal forecast, which will project tax revenue over the next two years. That will serve as the base for final budget negotiations. But tax receipts have failed to meet projections so far this fiscal year, leaving budget writers skeptical that the news will be good.

Still, Kenley said he wanted the Senate budget plan to reflect the chamber’s priorities, assuming the same revenue projections that Gov. Mike Pence and the GOP-controlled House relied on.

And the key priority is education.

The Senate plan boosts funding for K-12 schools by 2.3 percent in each of the next two years – which puts about $466 million more into education. That money will be used for traditional public schools, public charter schools and private school vouchers.

For public schools, the plan boosts the base per-student funding for all schools and starts to change the way districts receive extra money to educate their poorest students. Rather than relying on the free textbook or free lunch programs to determine who is considered at-risk in the funding formula, the Senate plan counts any student whose family qualifies for a welfare program and any student in foster care.

The Senate plan also designates more money for at-risk students than the House plan, which should mean fewer or less significant cuts to urban schools.

Sen. Karen Tallian, the ranking Democrat on the Appropriations Committee, said her caucus had not finished evaluating the plan’s impact on individual districts. But she said Democrats see a “significant problem that vouchers have not been made into a separate line item, especially for those who have never been in public schools.”

Currently, funding for all K-12 students – whether they receive vouchers or traditional funding – comes from the same pot in the budget. Democrats have been calling for those dollars to be separated.

Still, Tallian said, “There a re a lot of things we think are really good in this budget.”

It includes $220 million more for state colleges and university operations plus $367 million in bonding authority for new buildings on those campuses. It also provides $25 million for repairs and maintenance.

Sen. Ed Charbonneau, R-Valparaiso, said that’s more money than either the House or governor proposed for higher education this year. If the Senate plan is approved, “there probably shouldn’t be any need for tuition increases over the next two years,” he said.

And in fact, the budget proposal requires that the Indiana Commission on Higher Education review any planned tuition hikes.

The Senate budget includes $200 million per year in extra funding for highways plus additional dollars to fund new caseworkers for child abuse and neglect. There’s money to renovate a stadium at IUPUI to make it the home of the Indy Eleven minor league soccer team and funding to boost the Hoosier State Line, a train that runs from Indianapolis to Chicago.

There’s also more money for tourism, including new cash to help local officials boost messages about Indiana. That comes on the heels of national criticism that Indiana does not explicitly ban discrimination against gays and lesbians and passed a law to protect religious freedom, which some interpreted as permission to discriminate. Lawmakers followed with a “fix” that banned individuals or businesses from using religious freedom as a justification for discrimination. But economic officials worry the state’s image is already damaged.

“There are a lot of ways Indiana can work to make sure that good Hoosier image is the right one to have,” Kenley said.

The Senate Appropriations Committee approved the budget plan 8-3, sending it to the full Senate for consideration.

The vote comes on the last day for committee action this session. Three of the committee’s four Democrats voted no, in part because they said they’d had no opportunity to digest the plan and check the details.


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