He also said the city will move to narrow Washington and Jefferson boulevards downtown.INDIANAPOLIS – Senate Republicans voted 32-18 Tuesday to pass a nearly $30 billion two-year state budget despite some trepidation over a revenue forecast Friday that could force deep cuts.
The stage is now set for final negotiations with the Democratic-led House and Republican Gov. Mitch Daniels. Legislators have until April 29 to agree on the budget.
The Senate version of the spending plan relies on nearly $2 billion in federal stimulus money to prop up state education and Medicaid funding as well as some smaller programs.
This has Daniels and some other lawmakers nervous about what will happen in two years when the federal dollars run out.
Senate Appropriations Chairman Luke Kenley, R-Noblesville, said the budget safeguards $1.3 billion in reserves that can be used in the future to avoid deep cuts or a tax increase.
“We are doing the things that we think we need to do, but we are doing them in a prudent way that leaves us with a prudent balance and not an excessive cliff,” he said.
But Sen. Marlin Stutzman, R-Howe, is concerned that Friday’s revenue forecast will show that Indiana’s tax revenue is in even worse shape than expected.
“Are we going to be willing to come back and make those difficult cuts if those numbers show that is what we have to do?” he asked. “(Hoosiers) have asked us to cut spending, … and this is the perfect opportunity to say we are listening.”
He voted for the bill, along with all of northeast Indiana’s other senators.
The largest portion of the budget is devoted to education. It gives K-12 schools an average 2 percent increase each of the next two years. Daniels had suggested no increases while Democrats proposed relying on state reserves to give a modest bump.
Senate Democrats said Tuesday they don’t quibble with the amount or the prioritization of the money as much as the distribution.
They are especially concerned with changes made to the school-funding formula. Senate Republicans removed several factors in the formula that largely benefit urban schools, thereby cutting the amount of state revenue spent on education, and then used the federal money to cover the losses.
The budget also eliminates the ability of schools to rely on property taxes for a portion of their utility and insurance costs.
“How much can these school corporations take?” asked Sen. John Broden, D-South Bend. “All these things cumulatively added up create serious concerns.”
