The Indiana House Ways and Means Committee advanced House Republicans' $34.6 billion two-year budget proposal on Tuesday morning, ushering it to the full chamber for consideration.
The budget introduced by House Republicans includes an additional $286 million per year requested by the Indiana Department of Child Services, covers increases in Medicaid costs, and hikes K-12 spending by 2.1 percent in fiscal year 2020 and 2.2 percent in 2021, which is slightly higher than the 2 percent annual increase suggested by Gov. Eric Holcomb.
K-12 funding would be $7.31 billion in fiscal year 2020 and $7.47 billion in fiscal year 2021. Plus, the budget calls for spending $150 million in surplus funds to pay off a teacher pension liability that schools have been gradually paying down. The one-time payment is expected to save schools $70 million per year.
None of the extra money is required to go to teacher paychecks, although that's what Holcomb and House Republicans are recommending.
“At the end of the day, we are a local control state,” House Ways and Means Committee co-chairman Todd Huston said. “And we believe that local school boards and local teachers should come together to find the right pay system for them.”
Huston emphasized the funding for K-12 during a presentation on Tuesday, pointing out that the state has increased K-12 spending by 11.3 percent since fiscal year 2012 while inflation increased by 9.4 percent during that same time period.
But Rep. Ed DeLaney, D-Indianapolis, argued that the increases proposed for the next two years—2.1 percent and 2.2 percent—do not keep up with inflation, which is slightly higher.
The budget would have a surplus of about $63 million in fiscal year 2020 and $55 million in fiscal year 2021.
“It’s responsible, it’s balanced, it funds our key priorities,” Huston said about the budget, which covers the biennium that begins July 1.
One noticeable addition from Holcomb’s proposed budget is language that says no state government health insurance plan can deny coverage for someone on the basis of a pre-existing condition.
“We just wanted to make sure there was clarity that any state health plan didn’t exclude for pre-existing conditions,” Huston said. “We just wanted to have a public policy statement.”
The language would not apply to all health insurance plans—only those for state government employees.
“We only cover state employees, so it was just intended for that purpose,” Huston said.
During the committee meeting, Rep. Greg Porter, D-Indianapolis, introduced an amendment that offered the House Democrats version of the budget, but the Republican-controlled committee rejected the proposal.
The House Democrats budget included a 5 percent salary increase for all public school teachers and a cigarette tax increase. It also moved the $1 billion the state is expected to receive from an increase to toll rates on the Indiana Toll Road into reserves and restored $3 million in annual funding for the Hoosier State Line, the passenger train that runs four times per week between Chicago and Indianapolis.
“It brings the best of both worlds from our perspective,” Porter said.
DeLaney also offered a handful of amendments to the budget, including one that would have raised the cigarette tax by $2 per pack and one that would have increased minimum wage for state government employees from $7.25 per hour to $15 per hour, but the committee voted down both amendments.
Huston said even though House Republicans have supported an increase to the cigarette tax in the past, he doesn’t think it would pass this year.
“We all have the same goal—we do want to reduce cigarette smoking,” Huston said.
DeLaney called Huston’s suggestion that now isn’t the time “stunning.”
“I don’t know who’s lacking that appetite,” DeLaney said. “What’s lacking is will.”