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(INDIANAPOLIS) — The House and Senate have a deal on a new state budget Governor Holcomb

calls “transformational.”

The two-year budget gives schools a billion dollars in new money: a 4.6% increase

the first year, and nearly that much the second. House Speaker Todd Huston (R-Fishers) says

that’s enough to cover the $600 million a Holcomb-appointed commission said was needed to make teacher pay competitive with other Midwestern states.

While Republicans have long resisted telling local school boards how to spend their money, Huston

says that could change if the windfall doesn’t lead to the expected raises. He says the budget

fulfills legislators’ commitment to give local schools the resources they need to give teachers

raises, and says, “We’ll be watching closely.” And the budget does set two requirements

recommended by the teacher pay commission: schools must spend at least 45% of their

funding on teacher pay, and can’t reduce the total amount of money earmarked for teachers, even

if higher-paid teachers retire.

The bill recommends paying all teachers at least $40,000 a year, with schools required

to explain in writing if they don’t.

Budget talks were reshaped by a last-minute gusher of an extra $5 billion, from the federal

pandemic relief package and a better than expected economic forecast. The budget accounts for

the entire $3 billion in federal money, but some of that spending is subject to federal

approval or falls outside the two-year budget. Holcomb, Huston and Senate President Pro Tem

Rod Bray (R-Martinsville) say the budget creates flexibility for changing circumstances.

Along with the big increase for schools, the budget earmarks more than $4 billion in state

and federal money for one-time projects. What Holcomb calls the “bonanza” project among them

is a half-billion dollars for the regional redevelopment grant fund he proposed in his State of the

State address. That’s more than triple the amount the Senate had proposed for the fund before

last week’s economic forecast.

The budget also calls for paying down debt, funding the long-planned double-tracking of the South

Shore commuter railroad, and a handful of construction projects. It also sets aside money for

broadband, water projects, job training, hiking and biking trails, and police body cameras.

Holcomb says the combination of investments will allow Indiana to “accelerate away from 2020

faster,” while maintaining a balanced budget and rebuilding Indiana’s reserve fund for the next

downturn. He says the investments in both people and infrastructure will pay dividends for years to


Indiana Democratic Party executive director Lauren Ganapini calls the big increase for schools “encouraging,” but criticizes Republicans for expanding Indiana’s private-school voucher program. The bill extends eligibility to families earning up to triple the threshold for the free and reduced school lunch program.

The House and Senate will vote on the bill Wednesday or Thursday.