INDIANAPOLIS – A Democratic proposal to immediately boost Indiana teacher pay by $100 million a year by stretching out payments to a teacher pension fund was rejected Thursday by a Republican-controlled committee.
The Indiana Senate Appropriations Committee voted 8-4 along party lines against the Democratic plan that aimed to free up money by lowering annual state payments to the same pension fund Republican Gov. Eric Holcomb used his State of the State speech this week to propose adjusting next year.
That extra $100 million would have boosted funding for the Teacher Appreciation Grant bonus program by 267% this year. Estimates released by Senate Democrats show that the average teacher bonus in northern Indiana's Warsaw Community Schools could have increased from about $700 to nearly $1,900.
Committee members, instead, advanced a bill backed by Holcomb directing $291 million in unexpected state tax revenue to paying cash rather than borrowing money for several college campus construction projects that were part of the state budget approved in April.
Democratic Sen. Karen Tallian of Ogden Dunes argued that the state's $2.3 billion in cash reserves are sufficient for lawmakers to take action now on boosting the state's lagging teacher pay.
“I don't understand why we can't also consider some of these other desperate needs that we have,” Tallian said. “It is just wrong of us to ignore all these other things that we could correct this year.”
Holcomb proposed Tuesday making a $250 million early payment into that pension fund in 2021 to free up a projected $50 million a year by reducing needed annual state pension appropriations.
The debate over teacher pay comes after several thousand educators joined a boisterous Statehouse rally in November during which stagnant salaries were a top concern. Holcomb has repeatedly said he would wait for recommendations later this year for what he calls a “sustainable plan” from a teacher pay commission he appointed in early 2019.
The Republican-dominated House last week rejected other Democratic proposals toward increasing teacher pay.
The full Senate could take up the spending bill next week and send it to the governor's desk as Republicans fast-track it less than two weeks after the legislative session began. The Senate won't take action on most House-passed bills until at least mid-February.
House Democratic leader Phil GiaQuinta of Fort Wayne said Republicans are eager to be done with the only spending bill on this year's legislative agenda.
“The quicker you can get that off the calendar means you don't have to deal with it or talk about it anymore,” he said. “I'm sure that is part of the strategy.”
State Budget Director Zach Jackson told the Senate committee that the governor believed it was best to use the unexpected money on one-time expenses.
“The objective here is to avoid the interest costs entirely and provide the flexibility for the out years,” Jackson said.
The Democratic plan would have reduced the state's nearly $947 million pension fund payment for each year of the current two-year state budget by $100 million. Tallian said that would extend state payments into the fund by seven years until 2045.
Republican Sen. Michael Crider of Greenfield said such a major change in the state budget shouldn't be done piecemeal, recalling the Great Recession when he was a top administrator with the Department of Natural Resources.
“I know right now the outcome looks pretty good, but I can tell you before the recession the outlook was pretty good also,” Crider said.