Daniels: Cut spending, but boost schools-WEB ONLY

Indiana Gov. Mitch Daniels wants to slash overall state spending by 2.5 percent, but the budget he outlined in a live broadcast last night would give public schools and student aid a boost.

The Republican governor also said he’s willing to reach into the state’s piggy bank – a bit. He said he wants to keep at least $1 billion of the state’s $1.3 billion in reserves in case the economy gets worse.

“If legislators want to spend more on some favorite cause, that’s fine as long as they offset it elsewhere,” Daniels said.

Daniels said a budget proposal that cleared the GOP-led Senate in the regular session but didn’t pass the Democrat-ruled House would have spent too much. A revenue forecast released last week predicted Indiana will collect $1.1 billion less through June 2011 than April estimates had predicted.

With revenue down, cuts are needed, he said. State parks would be cut 8 percent under Daniels’ plan, while the Department of Homeland Security would lose 10 percent of its budget. Higher education funding would drop 4 percent.

But Daniels said there would be no cuts to state prisons and state police. And public education would get a 2-percent funding increase, while student financial aid would go up 3 percent.

Daniels said Indiana’s public schools have been lucky to avoid cuts similar to those found in other states.

“Our goal is to keep it that way, although in times this tough no sector has a right to demand business as usual,” Daniels said.

Education leaders had been worried about budget cuts or flat funding, which they said could result in teacher layoffs or larger classes. Some were happy to see the increase proposed for public education.

“That is a great step forward,” said Dennis Costerison, executive director of the Indiana Association of School Business Officials. “Until we really see all the details, it’s hard to tell, but we do find that to be a positive move.”

Details should come soon.

Legislative leaders hope to get more detailed information today, including how the budget would affect each Indiana school district, as they prepare for a mid-June special session. The current budget expires at the end of June, and most of state government would shut down if lawmakers can’t reach an agreement by then.

Indiana governors typically let lawmakers craft the formula that dictates how much money individual districts get. But legislators said Daniels didn’t provide clear budget guidance during the regular session, and they want detailed information about what his plan would mean.

“Everybody needs to know exactly how they’re going to be affected,” said Dan Clark, deputy director for the 50,000-member Indiana State Teachers Association.

Daniels said that every school would receive more money per student than it did last year.

House Speaker Patrick Bauer (D-South Bend) said he was waiting to hear the details of how the proposal would affect schools. An overall 2-percent increase in public education could mean gains for some schools while others lose money.

But Bauer said he was glad that Daniels was coming down from the position he took during the regular session of trying to keep all of the state’s reserves intact.

“If he had been that flexible, we wouldn’t have had to have a special session,” Bauer said.

GOP leaders in the House and Senate applauded Daniels’ effort, and said the budget also included $450 million in capital projects at universities and $1 billion in road and bridge projects that could create jobs.

Tony Bennett, the state’s superintendent of public instruction and a fellow Republican, said he was happy with the way Daniels’ proposal would affect education.

“At a time when 35 states are proposing education cuts, we’re fortunate to have a budget that increases education funding by 2 percent and increases per-student funding for every Indiana school,” he said.

Indianapolis Public Schools officials are lobbying for increased spending, saying they need resources to compete against neighboring districts. Otherwise, IPS will lose more students and will be thrown into a “financial death spiral,” district leaders wrote in an e-mail to parents urging them to contact lawmakers and Daniels.

Daniels, meanwhile, urged taxpayers to contact their lawmakers and ask them to say no to “the special interests who demand money we just don’t have right now.”