INDIANAPOLIS – Lawmakers would use $80 million annually to double a full-day kindergarten grant and give $5 million in additional aid to victims of the State Fair tragedy under a proposal outlined Tuesday by House Ways and Means Chairman Jeff Espich.
“You don’t always have to spend every dollar you get, and let me tell you there will be those who will find fault with my aggressive use of this money,” he said. “I think we’ve established those who are most deserving and that is again K-12 and the State Fair victims.
“I think it’s unwise to use more of our reserves.”
The plan, which has three major parts, will be placed in House Bill 1376.
An initial committee vote could come Thursday or Friday.
Sen. Luke Kenley, R-Noblesville, Espich’s counterpart in that chamber, seemed to embrace the idea of more school funding, but he does differ on changes to a related automatic taxpayer refund.
“I think that’s a very legitimate thing to do,” he said. “I’m with him in the sense that although we normally don’t make any appropriations during a non-budget year. I think it’s a fruitful idea to look at K-12 education, which is kind of everybody’s higher priority, and that looks like a good way to spend the money.”
The new spending is possible because of $320 million in one-time tax receipts found in a holding account by Gov. Mitch Daniels’ administration in December.
The mistake in counting corporate tax collections also resulted in budget officials’ increasing ongoing tax projections by about $100 million a year.
Espich wants to devote $80 million a year of that money to full-day kindergarten.
Lawmakers now provide an average of $2,750 per student for a half-day of kindergarten through the school funding formula. Then an additional $80 million is in a grant program to expand to full-day kindergarten, averaging $1,200 per student.
The proposal would double the grant program funding to about $160 million a year, or $2,400 per student for a total of about $5,100 per full-day kindergarten student.
The new funding would be available for the 2012-13 school year if approved.
As for the one-time money, Espich’s bill would provide an additional $5 million to aid the families of those killed or seriously injured in the State Fair stage collapse.
And he would prioritize an automatic taxpayer refund in a slightly different way than Kenley does in his own bill in the Senate.
Lawmakers last year created an automatic taxpayer refund, whose trigger is when the state’s reserves exceed 10 percent of the next year’s budget – about $1.4 billion.
Espich wants to tweak the statute so that every taxpayer would receive an equal tax credit instead of a pro rata share depending on the amount of taxes paid. The current estimate under this plan would be about $50 per taxpayer when Hoosiers file their tax returns in 2013.
Currently, the excess state dollars are split between a refund and teacher pension obligations, but Espich’s proposal would send the first $200 million to refunds, the next $200 million to pensions and any extra money to be split.
Under current projections, the excess reserves will be about $330 million, though tax collections continue to exceed expectations so that number could rise.
But with a 36-14 vote Tuesday, the Senate passed Kenley’s bill, which would keep the 50-50 split on any refunds between taxpayers and pension obligations. And it would make it harder to reach the trigger in the future by increasing the amount of money the state must have on hand to about $2 billion.
It would preserve the first refund, however.
All area senators supported the measure, which was opposed by both Republican and Democratic lawmakers.
