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INDIANAPOLIS – Budget negotiators struck a tentative deal Monday that would leave the state with $1 billion in reserves and give most schools a modest increase statewide.
But both the House and Senate still have to vote on the compromise today – just hours before the current state budget expires and non-essential state services could be shut down.
“I’m going to give this a vote; that’s my idea; give it a vote and see if it flies. It might not,” said House Speaker Pat Bauer, D-South Bend.
Bauer also called it a “Republican-flavored bill,” and said the House Republican caucus would have to put up a lot of votes for it.
Democrats control the House by a slim 52-48 margin.
“We feel pretty good about where we are right now,” said Senate President Pro Tem David Long, R-Fort Wayne. “Tomorrow is another day. We’ll see how people wake up.”
House Democrats agreed “in theory” to a compromise budget that spans two years and leaves a $1 billion surplus at the end of the biennium – two major concessions.
Previously, the caucus was pushing for a one-year budget and wanted additional revenue from the state’s reserves to aid education funding.
Education spending has always been the largest obstacle between the two sides. In general, the issue is whether urban and rural schools with declining enrollment are hurt too much by cuts while growing suburban schools see increases.
Senate Appropriations Chairman Luke Kenley, R-Noblesville, said the two sides agreed to put an additional $54 million into the school funding formula by cutting it elsewhere in the budget.
That means schools would get a 1 percent average increase in the first year and 0.3 percent in the second year.
“This is really a tough year to reach an agreement,” Kenley said. “With the difficulties in the economy, some of our political differences become more intensified.”
Rep. Matt Bell, R-Avilla, applauded the education funding, and said he would support the bill.
“It could have been a whole lot worse for schools,” he said, citing declining state tax revenue. “It’s a budget that focuses on needs, and not wants. Given our economic crisis, it is the most responsible proposal I have seen in six months.”
When Bell and his colleagues met near the end of the day about the agreement, loud cheers could be heard in the hallway outside the door.
The House Republican caucus might have to provide all 48 votes from their members with only a few Democrats in support. Senate Republicans control that chamber by a margin of 33-17 and could easily pass the budget without bipartisan support.
Rep. Win Moses, D-Fort Wayne, said he can’t support a budget in which Fort Wayne Community Schools could see cuts while the state gives millions in state tax revenue every year to fix the Indianapolis Capital Improvement Board deficit.
“It shortchanges our Fort Wayne schoolchildren,” he said. “I can’t vote for that.”
The budget also contains some important education policy decisions, and they generally lean to the GOP side.
For instance, there will be no cap on charter school growth as Democrats sought; there will be a small pilot program for online virtual charter schools and there will be a scholarship tax credit for those who donate to private school scholarships, though it was cut to $2.5 million a year.
Bauer and Kenley said higher education would see state operating cuts but would be authorized to use federal stimulus dollars to make up the difference.
And the compromise contains debt service for $333 million worth of new higher education capital projects – an effort House Democrats pushed as a way to create jobs for the struggling economy.
Lawmakers are pushing the envelope with today’s vote. The current state budget runs out today, and Gov. Mitch Daniels on Friday said all non-essential state services would shut down Wednesday, including state parks, highway construction, bureau of motor vehicles and casinos if a new budget is not adopted.
But the Indiana State Police and Department of Correction would continue functioning as a matter of public safety.
Long said it wasn’t necessarily Daniels’ warning of a state government shutdown that spurred progress.
“I think it was the natural pressure,” he said. “The prospect of not finishing on June 30 was distasteful to everyone – truly.”
