INDIANAPOLIS — Gov. Mitch Daniels made it official on Tuesday: Indiana is nearly doubling the amount it spends on full-day kindergarten, infusing an extra $80 million or so statewide into schools that offer the program next year.
He signed a spending measure approved earlier this month by the Indiana General Assembly that also hands an extra $6 million to the victims of the Indiana State Fair stage collapse, and ensures taxpayers will get about $70 back each next year.
And Daniels signed another bill Tuesday that will phase out the state’s inheritance tax — a move that, once in full effect after nine years, will mean the state is sacrificing about $160 million in annual revenue.
The spending and tax cuts are possible because Indiana is on track to close the current fiscal year on June 30 with around $1.8 billion in the bank — enough to dole out some extra cash and also trigger an “automatic taxpayer refund.”
The biggest take-away, Daniels said: “Virtually every Indiana family who wants that full-day experience for their 5-year-old will have it.”
State funding for education is divvied up on a per-pupil basis. Right now, schools get half of the amount they get for other students for each kindergartner.
They also get grants worth about $1,220 for each full-day kindergarten student — an amount that is increasing to $2,400 per child under the legislation Daniels signed Tuesday. That moves the state much closer to paying the full amount per kindergarten student that it does for other students.
The new money “will be helpful and definitely worth it,” said David Smith, the Evansville Vanderburgh School Corp. superintendent.
The refunds come because of a 2011 law that said once Indiana has a reserve of about 10 percent of the $14 billion or so the state spends in a year, the rest goes back to taxpayers in the form of an income tax rebate.
Lawmakers tweaked that program this year, making it less likely that future rebates will be issued. Still, though, Daniels said in 2013, he expects 3.3 million Hoosier taxpayer to get about $70 back.
“At some point, when budgets are balanced and reserves are full, the state should stop collecting money and leave it with the people who earned it. I think it’s a very important principle,” he said.
Meanwhile, the $6 million more for the families of the seven who were killed and dozens more who were injured in August’s Indiana State Fair stage collapse comes on top of the $5 million the state has already paid out.
That was the state’s limit for tort claims, but the General Assembly sought to increase that amount during this year’s legislative session.
“No amount of money will make up for what occurred, but we felt that we could do better by the victims and their families,” said House Speaker Brian Bosma, R-Indianapolis.
The phaseout of Indiana’s inheritance tax is a move championed by the Indiana Farm Bureau and other small business groups that have said it puts the hammer on businesses that are passed down through families.
“Never again, we hope, will a farm or a small business in our state have to change hands just because somebody can’t afford the inheritance tax otherwise,” Daniels said. “There’s a real matter of justice involved in this.”
The full-day kindergarten, state fair and taxpayer refund issues are all included in House Enrolled Act 1376. The inheritance tax phaseout is Senate Enrolled Act 293. Both cleared the General Assembly with little resistance.