Governor Holcomb’s proposed budget for the next two fiscal years was presented to the State Budget Committee on Thursday. Furthering what has become the established practice over the last numerous budget proposals from our recent state executives, the current administration again submitted a solid, balanced, fundamentally sound budget. Essentially, this means the budget meets all the basic obligations of the state without spending more than it can reasonably expect to take in, while also holding back enough to weather the ever-possible downturn. The roughly $34 billion biennium proposal, unveiled by Micah Vincent, direct of the office of management and budget, outlines allocations of the modest revenue growth projections.
It covers all the large, hot items, but building a budget is something of an impossible task in terms of making everyone happy. It provides a 2% increase for the single biggest demand, K-12 funding. That’s an additional $432 million. That’s lot of new money, yet inflationary increases are about 2%, so is this really a gain? The proposal provides $286 million for the Department of Child Services, a critical agency that has been underfunded in relation to rising need. Is this new amount sufficient or too much? These will be key debates.
The other big dollar item is Medicaid; in this area, the proposal is just trying to match the projected increases in obligations. Once you get past these three budget-busters, the dollar amounts for particular requests drop down considerably. Unfortunately, there is a great volume of budget demands in the lesser dollar tiers. They all can make good cases for why they should be considered priorities. Collectively, they represent significant expenditures and finish out the framework of the budget – and consequently, they all have relevance.
Beyond the line item dollar stuff, the budget bill always inevitably takes on other provisions that impact revenues and expenditures. In that respect, the Governor’s proposal identifies and incorporates some changes that will have significant economic development benefits. Among these: to make the Venture Capital Investment Credit transferable – something the Indiana Chamber has been promoting for the last several years, and of course, we applaud the move. Likewise, there is a whole complement of other statutory adjustments that will improve both our tax policy and our economic environment. Finally, it should be noted that there are a variety of provisions aimed at the workforce development challenges.
Everybody in the Statehouse knows the Governor’s budget proposal is simply a starting point for public debate and the House and Senate discussions. That said, the administration has taken on the tough job of laying it all out, and again, its product is a good one. Moreover, where the Governor stands on each item/issue is important. The allotments become points of comparison and a baseline for subsequent negotiations and compromise. Hats off to the administration and all who have spent the last year crafting this good, essential foundation.
Resource: Bill Waltz at (317) 264-6887 or e-mail: [email protected]