The Associated Press March 30, 2011, 11:06PM ET

Indiana House backs GOP state budget plan

The Indiana House on Wednesday night approved a new state budget plan that that would keep overall education funding at current levels while shifting more money to growing suburban school districts.

House members voted 60-37 on party lines to advance the $28 billion, two-year spending plan that was stalled during the five-week boycott by Democrats. It now goes to the Senate for consideration.

Ways and Means Committee Chairman Jeff Espich, R-Uniondale, told the House that the budget plan was responsible and prudent with no tax increases. Nearly half of the state spending would go toward K-12 education, but school funding of about $450 million, or about 3 percent, ordered by Republican Gov. Mitch Daniels over the past two years would not be restored.

"I'm not particularly happy about that, but that's all we have," Espich said.

The school funding distribution formula in the plan pays schools only for students actually enrolled, eliminating the phase-out of funding shrinking districts currently receive to help ease their financial losses.

That change would result in funding cuts of more than 5 percent for 40 of the state's nearly 300 school districts. The cuts would largely fall on urban and rural districts, with additional money going to suburban schools.

"It is the simplest, fairest school formula ever presented to the General Assembly," Espich said.

Rep. William Crawford of Indianapolis, the top Democrat on the Ways and Means Committee, said he expected many school districts would end up asking voters to approve property tax increases through referendums because of the funding limitations.

"I think they'll have no option," Crawford said.

Republicans had turned down numerous budget changes proposed by Democrats during debate on Tuesday, including requests for more money toward education and mass transit.

The Senate's Appropriations Committee took the unusual step of starting budget hearings before the House passed a spending plan because of the Democratic boycott. The Democrats didn't raise many objections to the budget during their walkout, and the boycott wasn't raised during the floor debate.

The budget plan approved Wednesday also:

-- Keeps operating funding flat for colleges and universities, while the governor had proposed a 3 percent cut. But the House plan does not fund any repair projects or authorize any new capital projects for universities.

-- Maintains current funding most state agencies and programs after those agencies had faced cuts of 15 percent or more ordered by Daniels from the budget approved in 2009.

-- Temporarily suspends pay raises for state legislators, judges and prosecutors.


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