This week marked a turning point in the legislative session as the deadline passed for the bills to move out of their second house and now head into their conference committees. While many issues remain, the main focus of the next two weeks will be on the state’s biennial budget. In an unusual Friday morning meeting, the Budget Conference Committee, comprised of House and Senate fiscal leadership, began hashing out the differences between the House and Senate versions of HB 1001. (Read a complete budget comparison.)
The debate going forward will largely center on how best to allocate expected revenues for the next two years. On Thursday, the state released the April updated revenue forecast which showed revenues coming in roughly $213M short of previous expectations in what Senate Appropriations Chairman Kenley (R- Noblesville) called a “wake up call for all of us.”
Reductions for IPS
As the single largest budget expenditure, the main focus will be on major changes proposed to the school funding formula as well as the governor’s request for increased funding for charter schools. Of particular interest for us is the impact these changes would have on Indianapolis Public Schools (IPS).
IPS was dealt a $32 million reduction in funding in the House budget. The Senate budget softens the blow to a $20 million reduction for IPS which bases its complexity index on social services insteadof only the free lunch program. Our concern is that a significant reduction in funding for IPS will slow the momentum of change within the district. We continue to work with IPS leadership and Board to implement the recommendations set forth in our IPS Operational Analysis.
Diminished Regional Cities Funding
One major issue yet to be hashed out in the budget negotiations is the appropriate level of funding for the Regional Cities Initiative. Both the Senate and the House have recommended $20 million over the biennium, far less than the $84 million Gov. Pence initially requested in his budget proposal.
The revenue shortfall projections can largely be attributed to declining average income of Hoosiers which makes talent and workforce development strategies such as Regional Cities that much more important to the future economic and fiscal health of our state.
Next week will start crunch time for conference committees. Indy Chamber will be following all of our priority issues as they move through conference committees and concurrences in both the House and Senate.