By Eric Bradner, Evansville Courier & Press
INDIANAPOLIS - Public schools would see their funding slightly increase, but overall state spending would drop 2.5 percent, according to a budget proposal Gov. Mitch Daniels outlined during a live television broadcast Monday evening. He said he's willing to tap into some of the state's $1.3 billion surplus, but he doesn't want to see the state's next spending plan force that backup bank account to dip below $1 billion in case the recession worsens the blow state tax revenues already have felt.
The General Assembly failed to pass a budget before its regular session adjourned April 29, and even if it had passed the spending plan it was considering, Daniels would have vetoed it because he said it spent $1 billion too much. His suspicions were confirmed when a revenue forecast issued last week predicted Indiana will collect $1.1 billion less in taxes through June 2011 than an April forecast had suggested.
Daniels is rolling out the budget he'll ask state lawmakers to pass in a special session later this month.
"If legislators want to spend more on some favorite cause, that's fine as long as they offset it elsewhere. Add a dollar, cut a dollar. And, of course, no gimmicks and no tax increases," he said.
The Republican governor's fiscal experts will make a more detailed budget presentation this afternoon before a special panel of budget negotiators from both the Democratic-led House and the Republican-ruled Senate.
Those lawmakers will work on the budget for about two weeks. That's when the governor is expected to call the full General Assembly back for the special session.
By allowing for public education funding increases and the use of some of the state's surplus, Daniels made key concessions that could help his proposal gain traction among House Democrats who consider education spending vital and insist on annual increases.
"That is a great step forward," said Dennis Costerison, executive director of the Indiana Association of School Business Officials. "Until we really see all the details, it's hard to tell, but we do find that to be a positive move."
House Speaker Patrick Bauer, D-South Bend, said he will wait and see the details, but he is glad the governor is no longer insisting on keeping the state's full $1.3 billion surplus intact.
Bauer said if Daniels had been this flexible during the regular session, lawmakers might not need a special session in the first place.
Daniels won the praise of his party's leaders, including the state's education chief, Tony Bennett.
"At a time when 35 states are proposing education cuts, we're fortunate to have a budget that increases education funding by 2 percent and increases per student funding for every Indiana school," Bennett said.
The budget Daniels is proposing would cut higher education funding by 4 percent. State parks would see 8 percent cuts, and the Homeland Security Department would face a 10 percent reduction. Among the hardest hit will be the Inspector General's Office, which faces a 13 percent cut, and the Department of Environmental Management, which could see its budget drop 11 percent.
Daniels said by making reductions, Indiana can avert the fate of other states Daniels said have "spent themselves into catastrophe."
The Associated Press contributed to this report.