INDIANAPOLIS — Republican Gov. Eric Holcomb is ever-so-slightly untwisting the tight state spending caps that were a hallmark of his predecessor's biennial budget proposals.
Indiana's new chief executive presented the Republican-controlled General Assembly a two-year spending plan Tuesday that not only increases expenditures above the expected inflation rate, but also makes targeted investments in specific projects likely to produce long-term economic benefits for the state.
In total, Holcomb proposes to spend $15.6 billion during the 2018 budget year that begins July 1, an increase of 2.3 percent over current appropriations; and $16.1 billion in the 2019 budget year, a 3.1 percent boost over 2018.
Funding for kindergarten through 12th grade education, the state's largest expense, would increase 1 percent to $7.05 billion for the 2017-18 school year, and another 2 percent to $7.2 billion in 2018-19.
In both years, Indiana would spend less money than it takes in — by $84.6 million in 2018, and $197.5 million in 2019 — leaving the state with a projected $2 billion budget reserve on June 30, 2019.
"Gov. Holcomb's introduced budget is honestly balanced and maintains prudent reserves to keep Indiana's AAA credit rating," said Micah Vincent, director of Holcomb's Office of Management and Budget.
Among the long-term investments included in the governor's spending plan is $10 million in 2019, and a similar expected contribution in future years, to help fund the double-tracking of the South Shore commuter rail line between Gary and Michigan City.
"This has been a single track for many, many years, and that really slows down the effectiveness of using that rail system ... to connect Northwest Indiana to Chicago," Vincent said.
Holcomb also is proposing to double to $20 million a year the state's investment in a prekindergarten pilot program operating in Lake and four other counties; boost higher education funding by $52 million over the two-year budget period; spend $20 million to promote entrepreneurship; and dedicate additional revenue toward luring businesses to the state and promoting local quality-of-place initiatives.
In addition, Holcomb declared his support for a 20-year road funding plan sought by many in the General Assembly, but did not specifically recommend how lawmakers should pay for it.
The governor has said he does not oppose transportation-related tax increases.
Other major spending items include $100 million over a seven-year period to upgrade technology at the Department of Revenue, $35 million over four years to increase pay for state police officers, $30 million to improve state police crime laboratories, $5 million a year in additional funding to combat infant mortality and $200,000 to further analyze water infrastructure safety and reliability.
State Sen. Karen Tallian, D-Ogden Dunes, a member of the State Budget Committee, said despite what she considers positives in Holcomb's budget — South Shore double-tracking, state police pay raises and economic development investments — she believes funding for schools and roads received insufficient attention.
"We would have expected that the governor's office would come up with a little more of a leadership role (on those issues) than just: Let the Legislature do it," Tallian said.
Holcomb's proposed budget now will be filed in the House as House Bill 1001.
Over coming weeks, the House Ways and Means Committee will study the plan and interview state agency leaders to decide how to revise the budget in accordance with the priorities of state representatives.
Once a budget is approved by the House, likely in late February, the Senate will spend several weeks making its own assessment of the proposal and imposing its own changes on the legislation.
Finally, key leaders from the House and Senate, along with the governor, will convene in mid- to late-April to devise and enact a compromise state spending plan.