(INDIANAPOLIS) — Senate Republicans have unveiled their version of a new state budget,
pumping more money into schools and spending a little less overall.
The House and Senate budgets give schools about the same 1.2% increase in the first year
of the two-year budget, but the Senate adds an extra $30 million the second year, bumping
a 2.5% increase to 2.9%.
The Senate budget revives Governor Holcomb’s plan to spend $400 million to shore up
teacher pension funds to free up money to do that. Senate Appropriations Chairman Ryan Mishler
(R-Bremen) says the state has “cash, but not cash flow.” He says Republicans won’t use one-
time money to fund an ongoing expenditure.
As Senate President Pro Tem Rod Bray (R-Martinsville) announced last week, the spending plan
doesn’t include the House’s proposed cigarette tax increase. It keeps the House’s 10%
sales tax on e-liquids, but for prepackaged cartridges, the tax is 10 cents a milliliter, assessed at
the wholesale level.
Mishler says it’s important to achieve “parity” with tobacco taxes to send the message to
teenagers that vaping isn’t healthy. The Indiana Chamber, which has supported raising both taxes,
charges the proposal fails to meet that goal, calling it “woefully inadequate” and worse than no tax
Two of the four Democrats on the Appropriations Committee joined Republicans in sending the
plan to the House floor. And even the other two call it a significant improvement over the House
version. Gary Democrat Eddie Melton notes the bill scales back a House expansion of school
vouchers, and gives legislators a voice in deciding how to spend money from President Biden’s
just-passed pandemic relief bill. The budget earmarks $900 million of that money, and
Mishler says he wants to include specific instructions for some of the $2 billion remaining.
But Democrats say they’re disappointed the bill doesn’t include money specifically for teacher
pay, even after the recommendations of a commission Holcomb appointed to suggest solutions.
And they say it doesn’t do enough to restore funding cut from state agencies when the pandemic
capsized the economy last year.
The budget’s never finalized till legislators get an updated economic forecast, expected next week.
The pool of federal money adds another consideration. Mishler says Senate Republicans are
close to agreement with the House, but not there yet.
The two budgets are only a half-billion dollars apart in total spending over the two years, with
several one-time items appearing in both. Both plans set aside $50 million for a new swine
barn at the State Fairgrounds, a quarter-billion to expand broadband, and another quarter-billion to
address the aftereffects of the pandemic. Both the House and Senate have called for an
assistance fund for restaurants, a new $50 million local health grant fund, and $150 million for
summer school to get students caught up on ground they lost when schools were closed or
online-only. And both include $150 million for Holcomb’s Regional Recovery Initiative, which the Senate rechristens the Regional Economic Acceleration and Development Initiative (READI).
And the Senate bill adds $100 million dollars in mental health spending to address issues
worsened by the pandemic. Mishler says he’ll talk with the Family and Social Services
Administration about more specific directions for how that money should be spent.