Senate Republicans revealed a two-year, $31.5 billion budget Thursday that boosts funding for schools, universities and highways and leaves the state with nearly $1.9 billion in the bank.
But the plan’s architect warned immediately that lower-than-expected tax receipts mean the budget may need cuts before it ever becomes law.
“The economy has not performed as we hoped it would,” said Senate Appropriations Chairman Luke Kenley, R-Noblesville. “The odds are we might have to do some downward revisions in order to live within our means.”
Lawmakers will find out more next week when they hear an updated fiscal forecast, which will project tax revenue over the next two years. That will serve as the base for final budget negotiations. But tax receipts have failed to meet projections so far this fiscal year, leaving budget writers skeptical that the news will be good.
Republican Gov. Mike Pence says he “will continue to urge caution on overall spending and reserve levels.”
“As we move forward, I believe we can maintain the state’s fiscal integrity and make the kinds of investments and reforms that will keep our economy moving and help our students and our schools succeed,” Pence said in a statement.
Still, Kenley said he wanted the Senate budget plan to reflect the chamber’s priorities, assuming the same revenue projections that Gov. Mike Pence and the GOP-controlled House relied on.
And the key priority is education.
The Senate plan boosts funding for K-12 schools by 2.3 percent in each of the next two years – which puts about $466 million more into education. That money will be used for traditional public schools, public charter schools and private school vouchers.
For public schools, the plan boosts the base per-student funding for all schools and starts to change the way districts receive extra money to educate their poorest students. Rather than relying on the free textbook or free lunch programs to determine who is considered at-risk in the funding formula, the Senate plan counts any student whose family qualifies for a welfare program and any student in foster care. The Senate bill would phase in that change over five years.
The Senate plan also designates more money for at-risk students than the House plan, which should mean fewer or less significant cuts to urban schools. And it doesn’t fund Pence’s proposal to give construction dollars to charter schools.
“I prefer the House budget’s approach to the public school funding formula where the dollars more closely follow the students in growing suburban areas,” Pence said. “I also prefer my budget’s approach where more funding is provided to public charter schools serving students in our urban areas.”
Sen. Karen Tallian, the ranking Democrat on the Appropriations Committee, said her caucus had not finished evaluating the plan’s impact on individual districts. But she said Democrats see a “significant problem that vouchers have not been made into a separate line item, especially for those who have never been in public schools.”