Indiana plan would direct surplus toward teacher pensions

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The Indiana House Ways and Means Committee has advanced a budget that includes a plan supported by Gov. Eric Holcomb to use $150 million in surplus funds to pay off teacher pension obligations.

Holcomb and lawmakers have said the savings to schools from the one-time payment could be passed along to teachers' paychecks.


The House plan from the majority Republican caucus, which cleared the committee Tuesday, proposes spending $34.6 billion on state operations for fiscal 2020 and fiscal 2021. The plan calls for a 2.1% school funding increase the first year, and 2.2% the second year, totaling $451 million. Holcomb had earlier proposed a 2% funding increase for schools.

State Rep. Todd Huston, R-Fishers, who is House Ways and Means Committee co-chair, called the spending plan conservative and responsibly balanced while funding priorities and maintaining reserves.

“Indiana ranks among the top states in the nation for its fiscal stability and that’s a result of years of strong leadership,” said House Speaker Brian Bosma, R-Indianapolis. “We plan to continue this trajectory with our conservative budget proposal that’s structurally balanced and protects our coveted AAA credit rating while still funding our state’s critical priorities”

Once approved by the House, the budget goes to the Senate which comes up with own version and once passed, the budget bill goes to conference. A final budget must be passed by the end of April. Holcomb unveiled his budget proposal at the beginning of January.

Holcomb is a Republican and the GOP controls both houses.

Together the proposed plan would provide $611 million in K-12 spending over the biennium. The plan does not specifically direct these revenues to teacher pay.

Indiana is ranked 31st among the 50 states in teacher pay during 2016, with an average salary of $50,715, according to the National Education Association. The legislature's minority Democrats want the Republican governor to spend more to boost teacher pay. They have a proposal that would provide teachers a 5% raise over the next two years. It would come at a cost of $150 million.

“Why is it that the House budget does not guarantee one cent for teacher pay raises?” Sen. Karen Tallian, D-Odgen Dunes, said in a statement. “It is clear that teachers require a pay raise this session, but the House Republicans refuse to guarantee that any education dollars would go directly to teachers.”

Tallian has said that the that the state could spend a portion of the $1 billion payment the state will receive for allowing the company that operates the Indiana Toll Road to impose a one-time truck toll hike. The first $400 million payment was received in October, a second $300 million will be paid in October 2019 and a third $300 million payment is expected in October 2020.

Holcomb has allocated the money to various road and other infrastructure projects without legislative approval.

“It also seems that, once again, $1 billion in new toll revenue is mysteriously missing,” Tallian said. “These new funds do not show up at all in the House budget bill. We know that this money is available, and it is the constitutional obligation of the legislature to decide how this money is spent.”

Indiana State Teachers Association President Teresa Meredith says the budget reflects some progress because it is at least offering more than Holcomb's education funding boost of 2%, but said it’s not enough.

“Educators and the students they serve expect more and deserve more,” Meredith said. “It’s time for our elected officials to deliver on their commitment to make teacher compensation a priority this session.”

In a statement Tuesday, Holcomb said he looks forward to working with the General Assembly on the budget.

Indiana has triple-A ratings from the three major credit rating agencies and Holcomb, along with fellow Republicans, have stated they want to protect the state's $1.8 billion budget surplus.

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State budgets Public school funding Eric Holcomb Indiana
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