Business and Economics

Pence Offers His Two-Year Buidget Proposal

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January 9, 2015 — TheStatehouseFile.com

INDIANAPOLIS – Republican Gov. Mike Pence wants to modestly boost funding for education but give much of the money to charter and private schools, part of an ongoing effort to expand the number of choices for students.

But critics of the plan said Thursday it will leave little new money for traditional public schools while giving more cash to failing charters. And House Speaker Brian Bosma, a fellow Republican, said his caucus will propose to spend even more on schools overall.

Pence’s two-year spending plan – presented to the State Budget Committee on Thursday – also provides more money for student financial aid, highway construction and tourism. It includes $25 million to build a new state archives building and another $25 million for a hotel at Potato Creek State Park, the first new inn since 1939.

It offers just a 1 percent increase in university funding.

But the most controversial part of the budget is the boost for charters, which are public schools that are generally not part of traditional districts and are free from some state rules. Those schools receive state per-student funding but don’t get property tax money for buildings and buses.

Pence proposes to give those schools $1,500 more per student. That would cost $41 million over two years – nearly a quarter of the $200 million in additional money he wants to allocate to schools.

“This is to address an inequity in charter funding,” said Chris Atkins, the director of the Office of Management and Budget. “When you look at total state, federal and local funding for charters, it is well below traditional public schools.”

Senate Budget Committee Chairman Luke Kenley, R-Noblesville, asked Atkins if F-rated charter schools would receive the additional funding in Pence’s proposal.

“We’re giving more money to more schools, regardless of performance,” Atkins said. “That said, I do think a separate discussion about how we incentivize and fund performance in our schools across the board in this session.”

Pence’s budget increases basic school funding by 2 percent in Fiscal Year 2016 and 1 percent in FY 2017. That adds up to a $200 million increase.

Sen. Karen Tallian, D-Portage, said that is “fuzzy math” and not nearly enough.  “That amounts to a 1.5 percent increase per year,” Tallian said after the committee budget

presentation. “Now, that doesn’t even keep up with inflation.”

Additionally, the $200 million isn’t only going to public schools — $41 million would be spent on charter school per-pupil funding and another $4 million would go towards school vouchers.

“They are trying to say they are giving $200 million to public schools, but the issue once again is that it isn’t going to traditional schools. It’s going to charter and voucher schools,” said Dennis Costerison, executive director of the Indiana Association of School Business Officials. “$155 million is actually going to K-12 schools, which is a far cry from a 2 percent and a 1 percent increase over the biennium.”

The governor’s budget also lifts a $4,800 voucher cap for Grades 1-8, which is meant to “incentivize more high-quality options for students,” according to a cheat sheet for the budget. That will move more money into vouchers.

For teachers, Pence’s proposed budget adds 10 percent more funding for teacher performance grants in FY 2016 and 2017 for a total of $63 million by the end of the biennium.

In higher education, the governor proposed a five-year phase-in for career and technical education. The plan would infuse career and technical education programs across the state with $20 million per fiscal year, concentrating on jobs with high demand.

The budget also aims to enhance college affordability, increasing student financial aid by $27 million in FY 2016 and another $12.7 million in FY 2017.

With the ambition of pursuing economic development and job growth in Indiana, the budget provides an additional $300 million to the Major Moves 2020 fund, which has already released $400 million in funding to expand highway capacity.

Kenley and Rep. Sheila Klinker, D-Lafayette, applauded the budget for its increased transportation spending.

“The real need, which is coming sometime in the next few years, is that we need some major infrastructure work done on our roads, bridges and highways both state and local,” Kenley said after the budget committee meeting.

A major component of the proposed budget is maintaining reserves in excess of the 12.5 percent level of annual spending. In the event of a recession, budget experts said the reserves could keep the state running for 50 days.

The budget $51 million in cash is proposed to fund the Miami and Wabash Valley Correctional Facilities in order to meet projected increases in the corrections population. An additional $43 million was included in order to support the staffing and operations of the Department of Corrections.

The governor’s budget also allots $56.1 million to commemorate Indiana’s bicentennial in 2016, which includes the archives building, state park inn and money for a torch relay, Bicentennial Plaza at the Statehouse, and an education center at the Indiana State Library.

Overall, the governor’s budget would spend $31.1 billion over the next two fiscal years and leave the state with a projected $2 billion in the bank by June 30, 2017.

“I feel good because the governor hasn’t put a straight jacket around us,” Kenley said. “He’s put together a fairly cautious and conservative budget, but he has clearly left room for us to have some input on where the spending decisions will need to be made and how they will be done.”

The budget passed committee by a roll call vote of 4-1 and moves to the House Ways and Means Committee, where it’s likely to undergo major changes.

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Pence’s budget priorities

  • $31 billion: overall spending
  • $200 million: K-12 funding
  • $1,500 per pupil grant: charter funding
  • $12 million: choice scholarships
  • $40 million: higher education operating and line item funds
  • $43 million: Indiana Department of Correction’s funding
  • $51 million: construction of additional cell houses at Miami and Wabash Valley Correctional Facilities
  • $300 million: expansion of highway capacity through Major Moves 2020 fund
  • $19.2 million: construction of Indiana University Medical School project in Evansville
  • $25 million: construction of a new State Archives building
  • $25 million: construction of new Bicentennial Inn at Potato Creek State Park — Source: TheStatehouseFile.com

 

 

 

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