Republican Budget Spends More On Schools, Changes Funding Distribution

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February 17, 2015 —

INDIANAPOLIS – The Indiana House Republicans released their first draft of the state’s next two-year budget Monday, which included more than $16 billion in K-12 education funding – a 4.7 percent increase from the previous biennium and significantly more than suggested by Gov. Mike Pence.

K-12 education comprises 52 percent of the GOP budget plan, while Medicaid expenditures – the second largest category – makes up 13 percent of the total financial plan.

House Ways and Means Chairman Rep. Tim Brown, R-Crawfordsville, said the first draft of the budget is “education-centered” and would mark the most money ever allocated by the state to K-12 schools.

However, the increased funding would reflect a change in the way Indiana provides money to public schools by closing the gap between schools that receive higher per-pupil funding, mostly urban districts, and those that receive far less, which are often suburban districts.

The two-year plan increases the target foundation – or base – amount provided to schools for every Hoosier student. But it also eliminates the additional foundation money given to schools for at-risk students. Instead, the at-risk funding becomes a separate grant with less funding.

Under the House GOP budget, the per-student foundation amount will increase to $4,984 in FY 16 and $5,105 in FY 17, while the grants that will be given to schools essentially cut funding for at-risk children by 25 percent.

The definition of an at-risk student would also change if the proposed budget is adopted, meaning schools will only get funding for students eligible to receive free lunch – instead of free and reduced lunch as is current law.

The reason for the change, Brown said, is to use the federally mandated free lunch criteria to ensure all schools are given the same amount of per-student dollars for at-risk kids.

Under the proposed budget, the per-student funding gap between the highest and lowest funded public school will decrease from the nearly $2,800 estimated in FY 15 to $2,148 in FY 16 and $1,618 in FY 17.

Charter school capital grants would be awarded under the House Republican’s budget to renovated facilities, purchase new facilities and technology equipment, and provide student transportation. The grants would total $40 million throughout the biennium and would not exceed $1,500 per student.

That replaces Pence’s controversial proposal to boost per-pupil funding for charter schools by $1,500, a move that shifted money away from traditional public schools.

Higher education would also receive a funding boost if the first draft of the budget eventually becomes law. The plan increases funding allocated to higher education by $45 million through the next two fiscal years.

Brown said prioritizing public safety was also a crucial element considered when writing the budget and Republicans allocated $80 million in the biennium for the Department of Corrections and local corrections programming. However, the budget excludes money for the addition of cellblocks at Wabash Valley and Miami Correctional Facilities – a specific request made by the DOC in its presentation to the House Ways and Means Committee.

Brown and House Republican leadership also included the transfer of $200 million each fiscal year to the Major Moves 2020 Fund to supply money for the upkeep and expansion of the state’s infrastructure. The budget proposal increases public transportation funding by $6.4 million throughout the biennium.

Under the budget, Indiana’s reserves will drop slightly from recent years, but will still fall in the 10-12 percent range of each fiscal year’s current revenue. By the end of FY 16, the reserves are expected to total nearly $1.86 billion and dip slightly to $1.851 billion in FY 17.

The proposed budget anticipates Indiana will spend $31.3 billion by the end of the next biennium.

Brown said he plans to present the budget to the House Ways and Means Committee on Tuesday, possibly hear public testimony on Tuesday or Wednesday, and have the bill move to the House floor by Thursday.

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