Kruse Report: Indiana Senate Budget is Responsive – and Responsible

A topic no legislator wants to discuss is making headlines in neighboring Illinois and Michigan – general tax increases. That’s why I’m pleased to devote this newspaper column to discussing the Senate version of Indiana’s state budget – which is balanced, realistic and contains no tax increase.

Our two-year $26.3 billion state budget passed through the Senate in bi-partisan fashion 36-13. It prioritizes education of our children, strongly supports universities, repays debts to colleges and local governments, and builds our rainy day fund.

We went into this process with four goals in mind: 1) balance the budget with no games and no gimmicks; 2) focus on education – both K-12 and higher education; 3) pay back $285 million owed universities and local government; and 4) grow state reserves beyond $1 billion in preparation for leaner times. Our Senate GOP budget accomplishes these important goals.

The $12.9 billion budget for 2008 and $13.2 billion budget for 2009 culminates many hours of discussion with state agencies, universities and other key officials from around the state. It takes the best of budget proposals from the governor’s office and the House of Representatives and accents those with elements that focus on the Senate’s true priorities – education, healthcare, and transportation.

I was pleased to support this proposal and hope that as the Senate and House conferees discuss it in conference committee, it will remain largely intact. Here are highlights of the Senate budget:

K-12 Education: Schools would see a 3.5 percent increase in 2008 and another 3.4 percent increase in 2009 – totaling $421.7 million in new monies. Full-Day Kindergarten grants would be expanded from $8.5 million in 2007 to $33.5 million in 2008 and $58.5 million in 2009. Charter schools, which are public schools, would continue to be funded like other school corporations. Remediation and free textbooks for students in poverty would be funded at current levels.

Higher Education: Universities would be repaid $62.2 million owed since 2002. They would see a 4.1 percent increase in 2008 and another 4.8 percent increase for 2009 – an additional $133.7 million. Another $9.2 million would go toward campus building projects. Bonding authority would be granted for $261.1 million in capital improvements. Student assistance would be increased 7.3 percent in 2008 and 4.2 percent in 2009 or $25.8 million over the two years.

Property Tax Relief: Our Senate budget funds our GOP-proposed property tax reform plan (discussed in last week’s Kruse Report) that offers immediate relief and long-term reform.

Economic Development & Transportation: Job creation would be bolstered by a fund to close deals with new companies. Indiana’s Life Sciences Initiative would receive $40 million in lottery franchise funds. New counseling would help reduce Indiana’s high rates of foreclosures and bankruptcies. Major Moves funds would go for $1.1 billion in new highway projects.

Health & Human Services: Medicaid funding for low-income healthcare would be increased 5 percent each year. Two hundred additional caseworkers would be funded for the Division of Child Services. Our budget funds a new statewide system for recording errors by healthcare providers and continues support for Community and Home Options to Institutional Care for the Elderly (CHOICE).

It’s encouraging to see the state finances remain in the black – so media headlines can focus on something more positive and colorful than government red ink.