On Thursday this week, the Senate released their version of the state budget for 2014/2015. I have continually said one of my goals for this legislative session is to help pass a balanced budget that protects Hoosier taxpayers, focuses on education and invests in our state’s infrastructure. While a large majority of the Senate’s budget was identical or similar to the House’s version passed in February, there are some key differences.
In both House and Senate budget, education is the top priority with over half of all appropriations going toward K-12, higher education and teacher’s pensions. Funding for school operations is roughly the same, including a 2 percent increase in 2014 and 1 percent increase in 2015, however, the Senate budget doesn’t allocate $300 million to be placed into the Tuition Reserve Fund, which was used during the last recession as an insurance policy to lessen the funding shortfall for schools. The Senate’s version also strips funding for a $7 million pre-kindergarten pilot program for low-income families.
Moving to higher education, the performance funding formula is very similar in both budgets as well as funding for Frank O’Bannon scholarships and 21st Century Scholars. However, the Senate budget would provide $600,000a year to fund the Principal Leadership Academy at Indiana State University (ISU), as well as providing $12 million for a new Ivy Tech facility in Hamilton County. The proposed Senate budget also eliminates funding for the STEM (science, technology, engineering and mathematics) and Minority Student Teacher stipend programs.
The Senate budget would lower the individual income tax rate from 3.4 percent to 3.3 percent which would translate into a state revenue loss projection of $71 million in 2015 and about $150 million in each year after. The Senate budget would also require that 100 percent of any Automatic Taxpayer Refund triggered in 2013 would be distributed to the Pension Stabilization Fund instead of language in the House budget that would have continued to split the additional reserves between taxpayers and shoring up pensions.
Road funding would be cut to provide an additional $118 million for state and local roads in 2014 and $214 million in 2015. In the House budget, there is an additional $250 million provided per year. The condition of our roadways is crucial for attracting employers and everyday transportation. I will work to advocate for a prudent amount of road funding that helps addresses current and future needs.
Overall, I believe both budgets are very similar, and I am happy to say both sides are working closely to find common ground on the few areas where there is disagreement. As a state, we have to live within our means. I will continue to push for spending levels that are sustainable for our future. Funding workforce training programs, strengthening the state’s education system and providing additional dollars for programs that will stimulate economic growth are sound investments for Indiana’s future.
Everyone in the General Assembly wants what’s best for Hoosiers, and I look forward to continuing the budget discussions until the end of April when we adjourn.