Published: June 24, 2009 10:52 am      

Indiana Senate OKs two-year budget bill

INDIANAPOLIS — Indiana Senate Republicans passed their version of a two-year state budget bill Tuesday, setting the stage for a showdown with the Democrat led-House as lawmakers try to pass a new budget before the current one expires June 30.

Senate Republicans billed their $28.5 billion, two-year budget — which includes about $1 billion in federal stimulus money — as fiscally prudent given the economy’s drag on state revenues. It would leave about $1 billion in reserves by July 2011.

That’s the minimum amount that Republican Gov. Mitch Daniels wants in the bank at the end of two years. In a symbolic show of unity, minority House Republicans joined Senate leaders in calling on House Democrats to accept the Senate’s budget bill.

“It’s a budget that is balanced, that’s responsible, that lives within its means and will not create a tax increase in two years,” Senate President Pro Tem David Long, R-Fort Wayne, said after the bill passed the Senate 33-17 mostly along party lines.

Senate Republicans also approved legislation that would allow Daniels’ administration to keep spending at current levels if a new budget is not enacted by midnight June 30, when current state spending is set to end.

Senate Republicans said it was a fail-safe measure that would prevent a shut down of state government if a new budget is not approved on time.

But Democrats who control the House 52-48 dismissed talk of simply agreeing to the Senate Republican budget, saying it doesn’t provide enough for public schools and would lead to teacher layoffs and program cuts. House Democrats already have passed a one-year budget that the State Budget Agency says would spend about $14.5 billion, including federal stimulus money.

Democrats in both chambers also have balked at the idea of a stopgap funding measure that would allow spending to continue at current levels for the next two years. They say it’s premature and would abdicate legislative authority over spending to the governor.

House Democrats said Tuesday afternoon that they wouldn’t accept the Senate plan as a final compromise, and a House-Senate conference committee planned to meet this morning to start serious negotiations on a budget.

Lawmakers did not pass a two-year budget by the regular session deadline of April 29, forcing the special session that began June 11.

House Speaker Patrick Bauer, D-South Bend, suggested House Democrats would insist on more spending on schools over the first year than is included in the Senate Republican budget.

“I think we owe it to the children of this state to fight the good fight,” he said.

House Democrats also want more university building projects approved, and their budget would tap $250 million from a trust fund created from leasing the Indiana Toll Road for local road projects.

Long said the Senate’s plan included provisions meant to strike a middle ground with House Democrats, including spending increases for schools and more money than Daniels originally proposed for programs such as public television and home health care.

Along with disagreeing over how much money should be spent, Senate Republicans and House Democrats are arguing over how it should be allocated in the next two years. The House plan would guarantee schools more money next year than they received this year. The Senate plan would not.

— The Associated Press