STATEHOUSE - Despite numerous compromises, Republican principles remain at the core of the newly adopted state budget, making it a pro-taxpayer, pro-education reform measure, state Rep. Phyllis Pond (R-New Haven) said today.

The House of Representatives approved the conference committee report on a two-year $27.9 billion budget today by a vote of 62-37, with all House Republicans supporting it. The Senate, by a 34-16 vote, approved the budget today as well. 

"With the tight economic conditions, we had to craft a budget that does not spend more than the state takes in or spend all the reserves," said Rep.  Pond.  "This budget accomplished that.

"The state's largest and most important sources of revenue are sales and income tax," said Rep. Pond. "With state unemployment rising, both revenue sources have declined. Our state's only option was to construct a conservative budget."

The budget includes Gov. Mitch Daniels' parameters for a budget he would approve:

• It contains no tax increases.
• It maintains at least $1 billion in state reserves.
• It includes cuts for each dollar spent above the governor's recommended amount.
• It uses one-time federal stimulus money for one-time purposes, including statewide infrastructure projects, university construction projects, some university operating expenses and the final installment of state-funded homestead tax grants. Title I and special education stimulus money will be used for one-time investments to improve facilities, technology and equipment; this would not increase base operating expenses.
• It does not raid pension funds, trust funds or use other dedicated money for operating purposes.

The new state budget also protects education and advances education reform efforts:

• It supports K-12 education with an average increase of 1.1 percent in calendar year 2010 and 0.3 percent in calendar year 2011.
• It fully funds enrollment growth at rapidly-growing schools.
• It includes an Educational Scholarship Tax Credit, providing hope for low-income students and families to attend the school of their choice.
• It allows charter school growth by removing Democrat-backed caps, which is critical if Indiana is to be eligible for federal competitive grants under the "Race to the Top" program. 
• It also allows the state Department of Education to create a program for federal matching grants for charter schools and grants charter schools access to state technology funds.
• It includes enhanced support for Ivy Tech Community College, improving the state's community college network as well as training opportunities for unemployed workers.

"All caucuses considered the advantages and disadvantages of spending and followed the governor's proposed guidelines," said Rep. Pond. "This is a two-year plan to keep Indiana from following the trend most U.S. states are following by creating a budget deficit. Hoosiers will not be taxed more, and we will protect the states vital reserves."

Rep. Jeff Espich (R-Uniondale), the ranking Republican member of the House Ways and Means Committee and the House Republican conferee on the budget conference committee, said that while the budget may not have included everything every member wanted, it is a budget that reflects the best interests of Indiana.

"This is an Indiana budget," Rep. Espich said. "Not everyone got their wishes, but, through all the discussions and hard work, the state is well-served by this budget. It does not increase taxes, the state maintains healthy reserves, and education spending is protected. Other states would love to be in our position."

The fiscal year ends today. If legislators had not passed a budget, most state agencies would have shut down Wednesday and most state workers would have been furloughed.