Republicans Will Dip Into Surplus Next Year - but Democrats Want to Go Farther
(INDIANAPOLIS) - 2020 is not a budget year at the statehouse, but legislators will be debating some new spending anyway -- and disagreeing about how much.
In the two months between the passage of the state budget and the end of the last fiscal year, the state collected about $300 million more than expected. Governor Holcomb wants to spend that money on five construction projects for which the state would otherwise have floated bonds. House Speaker-elect Todd Huston (R-Fishers) says that's the right approach. Instead of paying interest, Huston says the state will have additional money and flexibility for future budgets.
Holcomb has estimated the savings at $4 million a year.
Democrats argue the windfall on top of a $2.2 billion surplus means the state could give teachers a five-percent raise. Indianapolis Senator Greg Taylor says instead of trying to avoid floating bonds, the state should be embracing the idea while interest rates are low. By spreading costs out over 20 or 30 years, he says the state could free up millions of dollars for this year's budget.
Huston says that makes sense only if you assume the state will borrow money at some point, and the only question is whether to do it now or later. And he and Office of Management and Budget director Cris Johnston are both adamant that the windfall should only be spent on one-time purchases, not items like salaries which would then be part of the regular budget.
And while Taylor questions why the state is sitting on more than two-billion dollars of your tax dollars instead of either spending it or refunding it, Johnston says it's a critical backstop against a recession. He says the unexpected $300 million jump in revenue could just as easily be an unexpected shortfall. Holcomb has stuck to a benchmark of keeping a reserve equal to about one-seventh of state spending.
Holcomb has asked legislators to fully fund the final stage of a U.S. 31 upgrade north of Kokomo, a new swine barn at the State Fairgrounds, and new buildings at Ball State and the Columbus campus of Ivy Tech.
(Photo: Eric Berman/WIBC)