INDIANAPOLIS — Indiana’s state tax collections are expected to bounce back even stronger than expected from the pandemic recession.
A new state tax revenue forecast given Thursday to state legislators projects those collections going up by more than 4 percent in each of the next two years. That could mean about $2 billion more available for the new two-year state budget being finalized by legislative negotiators.
“Indiana continues to significantly outperform national economic averages, providing our state a unique opportunity to accelerate our growth by investing in our people," said Gov. Eric Holcomb in a statement.
Republican budget writers are already facing pressure to further increase school funding. The latest budget proposal endorsed by the Senate this week would increase overall school funding by 1.2 percent the first year and about 3 percent the second year.
The Indiana School Boards Association is asking lawmakers to invest in K-12 public education.
“Here’s a golden opportunity to significantly improve K-12 public education funding in our state,” said Terry Spradlin, executive director of the Indiana School Boards Association. “Lawmakers have a real chance to improve the state’s standing on per-pupil funding, which in turn would allow our local schools to make major improvements in teacher compensation.”
The association said Indiana ranked 39th in the U.S. in K-12 public per-pupil spending in 2018.
“We know that economic growth is tied to educational attainment. This is an opportunity for us to invest in the people of Indiana, and bring more economic growth to our state by increasing investment in education and regional economic development opportunities. We are now within reach of implementing Governor Holcomb’s teacher pay commission recommendation to put $600M a year in the school funding formula. This is the time to pay down the debt we owe teachers and their students by increasing our investment in the school funding formula,” said Assistant Democratic Leader Eddie Melton (D-Gary).
Republicans believe the money should be used to put the state in good financial standing for the future.
"For more than a decade, we have honestly balanced budgets and eliminated government debt. Pair that with our robust Hoosier resilience, and we are now in a place where we can make real, meaningful investments in Hoosiers' futures. This isn't a time for us to grow government, but rather to make investments that can eliminate debt and pay down pensions to free up money the state can use in the future," said Senate President Pro Tem Rodric Bray (R-Martinsville).
Gov. Holcomb agrees with the state using the money to pay off debts and improve infrastructure. He also said in a statement the money could be used to make a "wise and historic investments in our schools and education partners."