(INDIANAPOLIS) — Indiana suddenly has a lot more money to work with in the next state budget.
Legislators always get an updated economic forecast a week or two before finalizing the budget,
but the size of this year’s revision appears unprecedented. The General Assembly’s bipartisan
forecasting team predicts Indiana will collect $2 billion more in the next two years than it
expected in the last projection in December.
Forecasters say the economy has bounced back faster than expected, especially manufacturing.
And they expect the COVID vaccine and a pair of federal stimulus bills to accelerate the recovery.
Forecasters also expect Indiana will need $168 million less than expected to cover Medicaid
costs. They’re now expecting the public health emergency caused by the pandemic to run through
the end of July, which triggers more federal money for the state.
House Speaker Todd Huston (R-Fishers) and Senate President Pro Tem Rod Bray (R-Martinsville)
aren’t offering any hints on how they’ll spend the extra money. Huston says it’ll be a mix of higher
spending levels and one-time expenditures.
The Indiana State Teachers Association quickly called on legislators to make good on pledges to
raise teacher pay. A commission appointed by Governor Holcomb calculated in December it would
take $600 million to make Indiana salaries competitive with surrounding states. ISTA
president Keith Gambill says the union accepts Republicans’ stance that the state shouldn’t
earmark money for teachers specifically, but leave those decisions to collective bargaining in
individual districts. But he says legislators need to give districts enough money to do that.
Bray says the new money will reinforce existing priorities, with schools likely to be a big part of
that simply because they make up half the state budget already.
Budget negotiators were already trying to decide how to spend three-billion dollars in federal
pandemic relief. President Biden signed that bill last month, after the House had already passed
its version of the budget. The Senate bill includes $850 million of that money, and
Appropriations Chairman Ryan Mishler (R-Bremen) has said he wants to earmark more in the final
version.
Legislators have been hoping to settle on a final spending plan by Wednesday. The unexpected
boost will delay that, but Huston says he still expects to wrap up the session on Thursday.
