State lawmakers approve $34.6B budget to wrap up session

The Indiana General Assembly has approved the state’s $34.6 billion budget for the next two years, sending it to Gov. Eric Holcomb for his signature days ahead of the legislative deadline.

The budget increases school funding by 2.5% each year, providing an additional $539 million in base funding for K-12 education, and includes $74 million in additional dollars for other education programs, like the Teacher Appreciation Grant program and the Secured School Safety Grant program. 

It also allows the state to take $150 million from its reserves to pay off a future teacher pension obligation. That one-time payment is expected to save schools $70 million per year. 

The budget is expected to have an 11.6% surplus each year, which would keep reserves above $2 billion. 

The House voted 67-31 and the Senate voted 41-8 to approve it. Holcomb is expected to sign it.

"We all made sacrifices to push funding to K-12,” Senate Appropriations Chairman Ryan Mishler said. "In the end, I think the big winner here is the kids.”

But Democrats criticized the budget for not funding enough programs and prioritizing what they felt were the wrong initiatives. 

Sen. Karen Tallian, D-Ogden Dunes, said the budget includes $2.5 million to build a new swine barn at the Indiana State Fairgrounds, but lawmakers wouldn't agree to spend $20,000 for a program to train doulas to assist low-income pregnant women. 

"This budget is too meager, too tight-fisted," Tallian said.

The Indiana Department of Child Services will receive an increase of $256 million to its budget in 2020 and $246 million in 2021. The agency had requested $286 million per year in additional funding, and state lawmakers initially seemed willing to allocate that amount. Now, leaders say DCS has seen improvements over the past few months and doesn’t need the full amount.

As for workforce development programs, the budget doubles funding for Workforce Ready Grants from $2 million per year to $4 million per year, and doubles funding for Next Level Employer Training Grants from $10 million per year to $20 million per year. Both of those allocations were requested by the Holcomb administration. 

The 21 Fund, the state’s primary tool for promoting startups, entrepreneurship and research and development, will receive $29.75 million per year. That’s slightly down from the $30 million the fund previously received each year. 

The budget also includes language that had been in a different piece of legislation that is designed to close a loophole in online sales and hotel tax collection. 

That language is part of the funding formula the Capital Improvement Board is counting on, because the CIB receives some of its revenue from innkeeper taxes. The CIB estimates closing this loophole could generate an additional $1.6 million to $2.3 million annually for the quasi-government agency over the next 25 years.

One thing that didn’t make it into the budget is funding for Amtrak's Hoosier State line from Indianapolis to Chicago. The line is expected to cease operations without new funds.

“I would love for it to work,” House Speaker Brian Bosma said of the Hoosier Line. “But it’s just a subsidy that doesn’t appear to be taking hold.”

The Legislature is required to end the session by Monday, but top lawmakers pushed to wrap up their business this week. Passing the budget is the last action either chamber took.