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The Journal Gazette

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Wednesday, January 11, 2017 12:25 pm

Proposed budget is unveiled

Niki Kelly | The Journal Gazette

INDIANAPOLIS – State budget officials Tuesday laid out Gov. Eric Holcomb’s proposed budget that would give K-12 schools just a 1 percent increase in the first year.

Over the two-year period, schools would receive $280 million in new funding while the state maintains at least $1.8 billion in reserves.

Holcomb said the spending plan continues support for what’s working in the state while funding key priorities.

"Long-term funding for roads and bridges, high-quality education opportunities to prepare Indiana’s rapidly changing workforce, a strong focus on attacking Indiana’s drug epidemic and great service to Indiana citizens," he said. "I look forward to working closely with state lawmakers in the weeks ahead, and I’m confident we’ll conclude this session with a budget that meets our key priorities for Indiana’s future."

But Democrats immediately focused in on education dollars as lacking.

"State revenues are forecasted to grow 2.9 percent in 2018 and 3.9 percent in 2019," said Sen. Karen Tallian, D-Portage. "Public education funding will only receive small increases in funding; a 1 percent increase in funding in the first year of the budget and a 2 percent increase in the second year.

"State funding for education does not keep up with the forecast and shows a lack of priority on education funding."

Micah Vincent, director of the Indiana Office of Management and Budget, detailed the spending plan to the State Budget Committee.

Overall, the two-year state budget would go up 2.29 percent in fiscal year 2018 and 3.13 percent in fiscal year 2019 – spending $31.7 billion.

Vincent said the school funding is a starting point for discussion, noting the K-12 appropriation has been increasing in recent years. But the current budget is running a shortfall, forcing a tighter initial budget for schools in 2018.

One other major increase in the proposal is a $50 million-a-year spike for the Department of Child Services, which has seen skyrocketing caseloads for abused and neglected children.

The Holcomb proposal does not shift money collected from the sales tax on gasoline to roads – something the House Republicans are pushing.

Doing so would leave a large gap in the budget that would need to be filled or other expenses would have to be cut.

Vincent said that proposal will be part of the overall roads discussion.

He also defended the level of reserves – estimated $1.8 billion in 2018 and $2 billion in 2019. This is about 11.5 percent of annual operating revenue.

"We want to make sure we are well-positioned in case of an economic downturn," he said.

But groups seeking funding for various programs often point to the savings account as a place to start.

The House Ways and Means Committee will get the next crack at the state budget.