Holcomb’s Proposed Budget Spends One-Time Money To Pay Down Debt, Not Direct Relief
Gov. Eric Holcomb’s new state budget proposal would spend $1.13 billion over the next two years on one-time initiatives. And almost none of that would be direct relief for Hoosiers struggling during the ongoing COVID-19 pandemic.
Holcomb administration officials call the state’s financial situation a “pleasant surprise” – Indiana budget reserves should return to pre-pandemic levels this year.
And because of that, Office of Management and Budget Director Cris Johnston said the governor wants to prioritize one-time expenses – on items like paying down debt, broadband expansion and cash-funding a swine barn at the State Fairgrounds.
“Use these monies in a way to have a significant impact without creating ongoing obligations that we cannot fund over the long term,” he said.
Holcomb’s proposed state budget does increase K-12 funding by $377 million over the next two years – that’s an increase from current spending of 2 percent in the first year and an additional 1 percent the second year.
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But otherwise, state spending would be flat from the current budget and Democrats, like Rep. Greg Porter (D-Indianapolis), wondered why that’s true for some items.
“Why would we not increase the dollars for food banks – for the human infrastructure, for people who are in need of food?” Porter said.
Johnston said food banks, like other groups that have struggled during the pandemic, have received support from federal COVID-19 relief.
Indiana public colleges and universities would have funding cuts imposed during the pandemic restored under Holcomb’s proposal. Plus, the governor suggested funding increases of 1 percent in each of the new budget’s two years.
The one-time expenses proposed in Holcomb’s budget include $110 million to pay down debt on state projects (hospitals, a prison, Department of Natural Resources facilities and the State Fair Coliseum) that will save the state about $30 million over the next two years. There’s also a proposed $192 million to pay down highway constructions bonds.
The biggest chunk of the one-time money is $400 million to help pay for a teacher retirement fund. Doing so will free up about $69 million over the next few years in the state’s General Fund.
Holcomb’s proposal would leave the state with nearly $2.3 billion in budget reserves this fiscal year and in each of the next two.
Contact reporter Brandon at firstname.lastname@example.org or follow him on Twitter at @brandonjsmith5.