The Journal Gazette
Friday, April 23, 2021 1:00 am

General Assembly

$37.4 billion state budget passes

GOP-written bill wins Democrats' support

NIKI KELLY | The Journal Gazette

INDIANAPOLIS – The $37.4 billion GOP biennial budget was so popular Thursday that even Democrats voted for it – passing 96-2 in the House and 46-3 in the Senate.

“This is a wow budget. This sets the table,” said Rep. Matt Lehman, R-Berne.

All 29 Democrats in the House supported the measure and eight out of 11 in the Senate. Every northeast Indiana lawmaker voted for it except for Goshen Republican Rep. Curt Nisly.

The spending plan gives K-12 schools nearly $2 billion in new education money – money that lawmakers hope school districts use to give teachers significant raises. Indiana educator pay lags the rest of the nation.

“This is now up to local schools to make sure they compensate their teachers,” House Speaker Todd Huston said. “We will be watching.”

The final bill also spends $5.1 billion in one-time federal and state dollars. Some of those investments include broadband expansion, health grants, mental health programs, pension paydown; debt repayment; capital projects; grants for struggling businesses and a replenishment of the state unemployment trust fund.

The budget has a large amount in reserves – about $2.5 billion in the first year and $2.9 billion the second year.

“We do a lot. We are balanced. We are strong,” said House Ways and Means Chairman Tim Brown, R-Crawfordsville.

The K-12 tuition support provided by state dollars will grow 4.6% in the first year and 4.3% in the second year – more than double inflation.

One downside for Democrats was that the growth in the state's existing voucher program was more – 32% and 16%.

That's because the budget expands the program – it increases the individual grant for students and makes families that earn higher incomes eligible.

A new Education Scholarship Account program for special education students also will cost millions.

Sen. Jean Breaux, D-Indianapolis, said this lack of respect for traditional public schools is the reason she couldn't cross party lines with her colleagues.

She and other Democrats lauded some highlights of the budget that help Hoosiers – including increases for food banks, mental health, food desserts, police body cameras and health disparities.

Sen. Eddie Melton, D-Gary, said his caucus fought for Hoosiers and traditional public schools. And he said the mission was accomplished.

He and others pointed out the American Rescue Plan pushed by President Joe Biden made some of the progress in the budget possible.

“Because of the federal investments in Indiana we will be stronger,” Melton said.

One big disagreement was actually about something not in the bill.

Democrats had pushed to exempt unemployment compensation earned last year from the state income tax up to $10,200. The federal government already did so, but Indiana Republicans refused to do the same.

Rep. Matt Pierce, D-Bloomington, pointed out the budget gave $500 million in federal money to the state unemployment trust fund, which means businesses likely won't face an extra surcharge to build it back up.

And Sen. Greg Taylor, D-Indianapolis, said the state forgave taxes for corporations on federal PPP loans and should do the same for the regular people.

Republicans noted that some Hoosiers actually made more than their usual wage while on unemployment and should be taxed on it just like those who worked through the pandemic.

“It's the same practice that we have had forever,” Senate President Pro Tem Rodric Bray said. “Unemployment benefits have always been taxed.”

He also noted that if a Hoosier's overall earnings for the year are under $12,000 they don't have to pay taxes on anything – even the unemployment compensation. And he said the loans given to businesses were different because they were meant to keep people employed.

At a glance

Here are some highlights from a new two-year state budget that will kick in July 1:

• Reserves of at least $2.5 billion a year

• Nearly $2 billion in new K-12 dollars – 4.6% growth the first year in tuition support; 4.3% second year

• Restores higher education cuts in the first year; 2% growth second year

• Up to $3 million in state funding for gate expansion at Fort Wayne International Airport

• $2.4 million a year for Purdue to expand academic programs on the Fort Wayne campus

• $5 billion in one-time spending – a mix of federal stimulus and excess state dollars

• Implements a new vaping tax

• 1% cost-of-living adjustment for public retirees

• Fully funds Medicaid costs

• Pay bump for Indiana State Police, conservation and excise officers

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