Indiana Senate approves $34.6B budget with slightly more education funding

The Indiana Senate approved its two-year, $34.6 billion state budget proposal Tuesday morning, setting up final budget negotiations between both chambers as lawmakers close out the last two weeks of this year’s General Assembly.

The Senate Republican budget, which passed 40-8, appropriates slightly more funding to K-12 education than the Indiana House version or the amount Gov. Eric Holcomb suggested, but provides fewer dollars to the Indiana Department of Child Services than previous versions of the budget.

Half of the budget is allocated to school funding, with a 2.7 percent increase in the first year and 2.2 percent increase in the second year, totaling $535 million in additional base school funding over the next two years.

The Senate plan also includes $30 million more to school districts for one-time bonuses to teachers under the Teacher Appreciation Grant program and aims to free up district money by paying off $150 million in future teacher pension obligations, although it allocates the funding from a different source than the House plan. The one-time payment is expected to save schools $70 million per year.

Neither the House nor Senate budget plans require the increased funding to go toward teacher pay, as Republican lawmakers say decisions on school allocations are best decided at the local level. 

School districts would be required to have a public meeting to disclose how the savings from pension obligations would be spent. 

For DCS, the Senate plan provides an increase of $243 million in fiscal year 2020 and $223 million in fiscal year 2021, which is less than the additional $286 million per year requested by the agency and supported in the House draft. 

But — if needed — the Senate budget would also allow an additional $105 million to flow to DCS over the two-year period.

As in the House proposal and requested by Holcomb, the Senate budget doubles funding for Workforce Ready Grants from $2 million per year to $4 million per year, and doubles funding for the Next Level Employer Training Grants from $10 million per year to $20 million per year.

But the Senate version decreases funding for the 21st Century Research and Technology Fund, which invests in Indiana-based companies with a market size of more than $500 million, from $30 million per year to $22 million per year. 

The Senate budget ends the biennium with $2.2 billion in reserves.

The Senate considered 34 amendments — almost all drafted by Democrats — to the budget on Monday during about three hours of debate on the legislation. 

One amendment authored by Sen. Karen Tallian, D-Portage, that was accepted increases support for county jails housing felon inmates after sentencing from nearly $24 million each year to $40 million.

Lawmakers will work on drafting the final version of the budget during the next week. The updated revenue forecast for the state — which provides legislators with estimates of how much money the state will have over the next two years — will be presented to the State Budget Committee on Wednesday morning.

“This is a process. Our budget is always tentative until we have the final April revenue forecast,” Tallian said. “I guess we’re going to wait and see what happens tomorrow.”