Indiana lawmakers will have over $800 million in new money for the next two year budget but will still have trouble funding necessary programs.
Projections say that the State of Indiana will have an additional $828 million in additional money over the next two years. Governor Holcomb and legislative leaders say they want to increase educational funding, especially teachers salaries in the face of Indiana’s growing teacher shortage where low salaries have pushed veteran teachers leaving the profession and college graduates not going into teaching as a career.
But, despite the promising state revenue forecast, Indiana lawmakers will likely have less money to spend on child services and education than they’d hoped for when they start drafting the state’s next two-year budget in January.
Projections show the Medicaid program needs about $120 million each year in new dollars. And the Department of Child Services is seeking $286 million in new funding each year as it struggles to meet the needs of Indiana’s abused and neglected children.
If legislators give DCS and Medicaid their full requests, that leaves only $35 million in new tax revenue for all other state needs in the first year of the next two-year budget. The second year would have a deficit of $23 million, and the numbers don’t even contemplate increases for Indiana schools, inflationary state agency increases or school safety funding.
The revenue forecast puts plans for an appreciable teacher pay raise in jeopardy. Every 1 percent of K-12 funding increase costs about $70 million.
