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House Republicans go big on K-12 spending, shortchange public health

INDIANAPOLIS (WISH) — The Indiana House’s top budget writer on Friday said House Republicans’ budget proposal makes major education and health investments despite differences from the governor’s proposal.

Republicans on the House Ways and Means Committee unveiled their planned budget numbers on Friday afternoon. The budget mostly follows what Gov. Eric Holcomb asked for last month.

Vouchers expanded, no teacher pay raise

House Republicans want to boost basic public K-12 funding by $1.6 billion over the next two budget years, more than the $1.157 billion increase Holcomb requested. Notably, this includes a 4.4 percent increase in the complexity grant, which provides additional funding to schools that serve low-income communities. Ways and Means Committee Chair Rep. Jeff Thompson, R-Lizton, said this is the first time in several years the complexity grant will grow at a faster rate than the base funding formula. He said the basic funding boost works out to an average of roughly $20,000 per classroom in additional funding.

Thompson’s budget would eliminate fees for textbooks and other curricular materials such as tablets, something Holcomb specifically requested in his State of the State speech, and a move Democrats have been advocating for years. It also would expand eligibility for Indiana’s school voucher program to any family making up to 400 percent of the income limit for free or reduced-price lunch eligibility. That works out to about $220,000 per year for a family of four. In addition, the various pathways people must meet in order to be eligible for the voucher program would be eliminated.

Holcomb asked lawmakers to bring the average salary for teachers up to $60,000 per year from the current $56,600. The House GOP budget includes no such provision. Instead, Thompson said local school boards will decide whether to use the additional funding to raise pay.

Public health gets the short end

Indiana currently spends $55 per person per year on public health, among the lowest in the nation. A blue-ribbon panel last year recommended state lawmakers inject an additional $480 million into the public health system over the next two years, enough to bring Indiana up to the national average of $91 per person. Holcomb went lower, asking lawmakers for $347 million. House Republicans are proposing increasing funding by $225 million, less than half the public health commission’s original recommendation. Separate legislation working its way through the General Assembly would provide local health departments access to the extra funding if they agree to provide an expanded, uniform set of services such as disease control, health inspections and HIV services.

One area in health where House Republicans are exceeding the governor’s recommendation is raising the Medicaid reimbursement rate for physician services. Holcomb asked for 83 percent of the Medicare rate. House Republicans instead are going for 90 percent.

Taxes and tax relief

Although the GOP budget does not include any new tax cuts, it speeds up the implementation of income tax cuts enacted last year. This would bring the income tax rate down to 2.9 percent by 2026 instead of 2029. Thompson doing this likely means the state would not need to provide another tax refund.

Thompson said relief from rising property taxes is addressed in House Bill 1499, which among other things would increase homeowners’ homestead deductions.

Senate Republicans at the beginning of the year said they do not favor any further changes to Indiana’s tax code until they have had a chance to put together a panel to study the feasibility of eliminating the state income tax altogether. Asked whether this poses an obstacle to House Republicans’ plans, Thompson said he expected robust discussions on the matter.

The rest

Rather than set up an annual $300 million appropriation to help the Indiana Economic Development Corporation’s development projects, Republicans on the committee want to provide a one-time payment of $500 million. The budget also includes Holcomb’s request to establish a $150 million revolving fund to help close on sites such as the planned technology park in Boone County.

State troopers, conservation officers, gaming agents, and excise police all would see their starting salaries rise to $70,000 per year. There is also funding to modernize several National Guard armories.

Food banks would receive $4 million per year in state funding, double the current amount.

Universities would get a 4 percent boost in operating appropriations during Fiscal Year 2024 and another 2 percent in FY 2025. Additionally, Purdue University’s Animal Disease Diagnostic Laboratory would get $5 million for lab facility upgrades.

The next steps

The Ways and Means Committee is scheduled to vote on the budget on Monday morning. House Democrats will try to insert their own proposals into the budget at that time. After the committee vote, the budget moves on to the full House floor. The lower chamber has until Thursday to make changes and will need to send the budget to the Senate no later than Feb. 27.