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(INDIANAPOLIS) — Schools won’t face budget cuts due to the pandemic, but the rest of Indiana’s budget is in for some serious belt-tightening.

Indiana entered the pandemic with $2.3 billion in reserves. But State Budget Agency director Zac Jackson says the state has already spent $1 billion of that to pay the bills the last two months.

There’ll be a formal update of the state’s budget forecast later in the year, but Jackson says he expects another $2.7 billion in shortfalls over the 13 months remaining in the two-year spending


If nothing else changed, a shortfall that size would mean the state would go broke sometime around

January. The state has received $3.6 billion in federal aid under the CARES Act, and while there are limits on how that money can be spent, Holcomb says the money earmarked for schools is enough to keep a planned $180 million funding increase intact. He says the commitment to stick to the budgeted amount reflects schools’ priority to the state.

Schools make about half the total state budget. State agencies have been instructed to slash spending 15%t. And the state has already cut university funding by $103 million.

Jackson says the state is holding on to about a third of the CARES Act money in hopes Congress will

loosen the rules on how it can be used.