Kenley: Slower-than-expected tax revenue warrants caution

The Indiana Senate’s budget architect said he might be a bit more restrained with spending in his version of the next two-year budget because the state has not been meeting its revenue projections for the current fiscal year.

Sen. Luke Kenley, R-Noblesville, chairman of the Senate Appropriations Committee, said he’s already killed more 30 bills during the first half of the session that would have spent money.

“You might see me be a little more cautious than the House. I’m concerned that when April shows up, that if we had to make a lot of cuts at that time, it could be a lot of pressure on everybody,” Kenley said. “When you’ve been through the process of having to cut, it makes you very careful about deciding how to spend when you have the opportunity to spend new money.”

For the first eight months of fiscal year 2015, revenue is 1 percent – or about $91 million – below projections made in December.

Among the likely targets for savings: A House-backed proposal to create a tax credit for teachers who spend money on supplies. That’s a key provision on the House Republican agenda.

Other changes are likely in the funding formula that divides money among school districts.

Kenley said he will not try to “outbid the House” on the amount they’re spending on education. But the formula itself is “going to be a topic of big discussion.”

“There’s going to be a lot of work,” he said. “The biggest thing is just with the overall amount of money that the House put in there, there is no reason why we shouldn’t be able to make all schools feel like they benefited from the formula.”

The House passed a two-year, $31.4 billion budget that boosts overall K-12 school funding by 4.7 percent through two years but changes the way that money is divided among districts. In general, the funding formula means more money for suburban districts that are growing and less for urban and rural districts that are losing students. The goal is to reduce the gap between the urban districts that receive the most funding per student and the suburban ones that often receive the least.

Kenley said he appreciates that the House budget plan puts money into what’s called the foundation – the base amount of funding distributed to every district on a per-student basis. He said that increase represents “an enormous commitment to education considering the revenues that we are expected to receive.”

“I think that really shows a high priority on education funding in the state,” he said.

Many of the bills Kenley killed earlier in the session would have funded programs backed by veterans. During Thursday’s meeting of the Senate Appropriations Committee, representatives of veterans groups requested funding for 10 new programs.

Among them is seed funding for a hyperbaric oxygen therapy program meant to help veterans suffering from post-traumatic stress problems and brain injuries.

James Bauerle, a retired brigadier general who volunteers for the Military/Veterans Coalition of Indiana, said the project would cost $2 million to start, and would allow the state to recoup federal funds.

Kenley said the requests showed the veterans’ persistence. But he said his actions to kill the bills reflected his intention of spending new money on the programs.

Kenley also said the Senate budget will reflect his goals to push the state to spend less on student testing and more on career and technical education, something Gov. Mike Pence has placed a focus on.

“I think you’re going to see us work real hard on the career and technical education piece,” he said. “I think the House had so many things on their plate that they didn’t quite have a chance to do a very robust plan on that.”

The Appropriations Committee plans budget hearings during the next two weeks before unveiling the Senate GOP spending plan.