INDIANAPOLIS – Indiana legislators dodged a state government shutdown Tuesday when they passed a $28.7 billion, two-year state budget that largely protects Hoosier schools during a severe economic recession.
The successful votes signaled the end of a special session and a budget battle that had dragged on since January.
"We must work together to be leaders for all the people in this state, not just the people in your district," Senate Appropriations Chairman Luke Kenley, R-Noblesville, said. "I ask you to vote yes even though you hate this budget. It’s better than no budget."
In the end, Republicans provided the majority of the votes for the compromise spending plan.
The House tally of 62-37 consisted of ‘yes’ votes from 48 GOP members and 14 Democrats. In the Senate, the vote was 34-16, with four Democrats joining 30 Republicans in support.
"Like any compromise, this budget has its defects, but it meets the fundamental condition I laid down in January and every day since: to limit total spending enough to preserve our surplus and thereby protect taxpayers against the tax increases happening in virtually every other state," Gov. Mitch Daniels said via a prepared statement.
Republican leaders expect Daniels to sign the bill into law. He will meet with reporters Wednesday for further comment, but said recently the budget needed only to pass to avoid an immediate shutdown.
The budget gives a 1.1 percent average annual increase to schools statewide the first year and 0.3 percent in fiscal year 2011. It was the biggest area of compromise throughout the regular and special legislative sessions.
The governor sought to essentially flatline K-12 funding while the most recent Senate Republican version of the Senate gave a 0.5 percent increase each year.
Despite the improvement, many Democrats said their caucus didn’t fight hard enough for the children in urban and poor rural schools with stagnant or declining enrollment.
Rep. Greg Porter, D-Indianapolis, pointed out that 100 school districts will lose money next year with more cuts coming in 2011.
"It’s toxic when it comes to public education," he said.
Locally, Fort Wayne Community Schools will get a 1.5 percent increase in 2010 and 1.1 percent in 2011; East Allen County Schools will go up 0.7 percent in 2010 before dropping 0.5 percent in 2011; Southwest Allen County Schools will go up 0.1 percent each year and Northwest Allen County Schools will go up 0.9 percent in 2010 and 0.2 percent in 2011.
There were compromises on both sides on other issues – the biggest of which was Daniels finally agreeing to spend about $300 million of state reserves. That means the budget will not be balanced for the first time in his tenure.
And Republicans also added more spending for higher education capital projects – something Democrats pushed as a job creation tool.
Overall, the budget authorizes $333 million in higher education projects. That includes a last-minute addition of $10 million for the Northeast Indiana Innovation Center to build a Global Design & Technology Center building and Center for Leadership in Advanced Manufacturing Performance – possibly creating 35 new jobs.
But Democrats clearly gave more in the negotiations.
They wanted a one-year budget but accepted a plan that spans two years.
They sought a charter school cap but the final product didn’t contain one.
They opposed a tax credit for Hoosiers who donate to private school scholarships but the budget contains the program at a cost of $2.5 million.
They contested money for virtual charter schools and the budget contains a pilot program.
"We should go home and be ashamed," Rep. Vernon Smith, D-Gary, said. "We gave in. We caved."
Rep. Win Moses, D-Fort Wayne, and Rep. Phil GiaQuinta, D-Fort Wayne, voted for the budget. Moses originally thought he would vote ‘no’ but said he changed his mind after talking to Fort Wayne Community Schools’ officials and seeing the Innovation Center appropriation.
In the House and Senate, all Republican area lawmakers supported the budget.
"These are the toughest times we’ve ever experienced to write a budget. Bar none," Rep. Jeff Espich, R-Uniondale, said. "I think we’ve done a remarkable job, bipartisanly, collectively."
Tuesday’s vote came not a moment too soon, as the current state budget expired at midnight and Daniels prepared throughout the day to shut down nonessential services.
It would have been the first time since 1887 that the General Assembly failed to pass a new state budget.
- Spends $27.8 billion; leaves a $1 billion surplus
- Incorporates more than $1 billion in federal stimulus aid
- Gives average annual increase in state funding for schools – 1.1 percent in 2010 and 0.3 percent in 2011
- Essentially holds funding flat for public colleges and universities
- Authorizes bonding for $333 million in higher education capital projects, including $10 million for Ivy Tech Community College in Warsaw; a parking garage for IPFW and $10 million for research center at the IPFW Innovation Center
- Allows money in Allen County’s major bridge fund to be used for construction and maintenance of other bridges
- Establishes interim study committee on gaming issues, including whether Fort Wayne should have a referendum on legalized gambling