Budget Bill

Kevin Corcoran, for the Indy Star, has an article entitled Daniels says he will sign GOP budget: In reversing course, governor praises lawmakers, says he’ll close the spending gap himself

“I’ve said all year that I thought Indiana ought to have a budget that was honestly balanced now,” Daniels said. “The legislature, after a lot of great work, has produced a budget which is balanced. It’s honest. But it isn’t balanced now. It comes very close, and I’ve decided to sign it.”

. . .

“With zero interest from the Democratic side, we had to go with something that would attract virtually every Republican vote,” Daniels said. “That’s why we came up a little short of the grand slam.”

From the sidebar of the article:

Budget highlights

Here are highlights of the 2005-07 budget bill:

Taxes
Includes no state tax increase but would require higher property taxes.

Spending
Spends $307.4 million more in 2005-06 and $170.1 million more in 2006-07, for increases of 2.6 percent and 1.4 percent, respectively.

Schools
Increases school funding by 1.2 percent next year and 1.3 percent in 2007.

Deficit
Eliminates the state’s nearly $600 million deficit by mid-2007.

Medicaid
Increases Medicaid funding by 5.2 percent a year.

The Evansville Courier Press explains the property tax issue by saying

The bill would allow property taxes for schools to go up an additional $4 million on top of the higher base in 2007.

The bill grants all schools statewide an average of just more than a 1 percent per year general funding increase. But to counteract a new funding formula that has funding more closely track enrollment, not a per district minimum, the budget would allow corporations to raise property taxes to cover several costs.

If I understand right (and I may well not, since I haven’t read the bill), state legislators are magnanimously passing the buck, allowing local government to raise property taxes to fund schools.

The Indy Star has a related editorial that says:

In short, Republicans lawmakers, with little or no Democratic support, are ready to approve a budget that eventually arrives at a balance while also avoiding tax increases.

Those moves, however, won’t come without costs — to schools, to universities and to the poor and sick.