Apr 19, 2023 - Politics

Lawmakers get big funding boost ahead of final budget negotiations

Illustration: Allie Carl/Axios

Indiana is flush with cash — good news for lawmakers in the final days of drafting the state's next two-year spending plan. Or is it?

Driving the news: The state budget agency released an updated revenue forecast Wednesday, showing that Indiana has about $1.5 billion more to spend than anticipated.

Why it matters: The state budget that lawmakers will adopt by April 29 will dictate how much money will go to K-12 schools, economic development efforts, mental health services and more.

The big picture: Lawmakers quickly splashed a bit of cold water on the surprisingly rosy forecast, noting that more money to spend over the next two years means more funding requests.

  • "It just makes the job harder when there's more money because there's more people asking but … we're just fortunate to be in that position," said Sen. Ryan Mishler, a Republican from Mishawaka and top budget writer in the Senate.

The other side: While Republicans maintained a stoic front, Democrats took the opportunity to call for increases in education spending and new investments in social services.

Between the lines: More money doesn't necessarily help when lawmakers are at odds over policy issues rather than just funding levels.

  • The House wants a massive expansion in the state's private school voucher system, calling for expanding access to wealthier families, while the Senate would like to see the program unchanged.
  • Public health funding, which both chambers have funded at level lower than Gov. Eric Holcomb would like to see, is also unlikely to benefit from the influx because of concerns that the state health department would have too much power.

Yes, but: The money could smooth over a debate between GOP caucuses about how to fund more robust mental health services.

  • The Senate considered imposing a cell phone fee, while the House floated an increase in the cigarette tax, but now a new funding source might not be necessary.

Flashback: When lawmakers were writing the last biennial budget in 2021, the final revenue forecast showered them with an extra $2 billion to spend — an unprecedented windfall driven by pandemic-related stimulus spending.

  • Schools were the big winners in that budget, receiving an extra $1 billion in an effort to boost the state's lagging teacher pay.

The bottom line: Indiana's economic picture is better than expected, meaning the state may be sidestepping the downturn that analysts predicted back in December.

  • Inflation is still high but it didn't curb consumer spending as much as originally predicted.

Editor's note: This story has been updated to include Democrats' perspective.


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