Key Points:

• This is the first balanced budget in the past 10 years.



• There are NO TAX INCREASES in this budget.



• This budget eliminates the structural deficit in 2007.



• We share the Governor's vision for a balanced budget and elimination of the structural deficit, but at this point we do not see the need for a tax increase.



• We balance the budget with no gimmicks.



• The budget provides $181 million additional state dollars over the biennium above the 2005 appropriation level for education.



• We keep our promise to schools in fully funding the existing school formula funding the shortfall.



• We increase funding for healthcare/Medicaid to the most needy by 3% per year above the 2005 appropriation - a total of $121 million additional dollars.

The following bullets are from Chairman Espich's Presentation:

HB 1001 Indiana 2006/2007 Deficit Reduction Plan

Budget Highlights

• Balanced FY 2005 through FY 2007
  
• Ends Structural Deficit in FY 2007
  
• No Tax Increases
  
• No additional borrowing, delays or use of other dedicated funds
  
• Silent on previously incurred payment delays

Combined Reserve Balances

• Year end balance for FY 2005=$659.0
  
• Year end balance for FY

Structural Deficit/Surplus

• FY 2005=$(526.6)
  
• FY 2007=$78.7

Budget Priorities

• K-12
  
• Child Welfare Caseworkers
  
• Medicaid
  
• SSACI
  
• PTRC's

FY 2006/2007 Biennial Budget

K-12

• Funds FY 2005 deficiency=$20M
  
• Tuition support and PTRC's=$155M
  
• Local Funds=$71M
  
• Total= $246M
  
• Restores Transportation Funding Authority

K-12 Formula

• Funding follows student-NOT corporation
  
• Declining enrollment\increasing enrollment adjustment
  
• Increased use of complexity index to support disadvantaged students and schools
  
• Property tax controls hold property tax burden consistent while providing additional funding for education
  
• 2% existing capital projects account funding maintained
  
• Maintains foundation grant per student
  

Higher Education

• Funds 25% of HEC recommendation for enrollment growth=$23.8M
  
• Equity funding=$9.1M
  
• Maintains $4,700/$9,100 SSACI support level
  
• Cost=$46.5M

Medicaid
o Funds $121.0M FY 2005 overspending for both 2006 and 2007
o Adds $121.0M more funds over 2004/2005 biennium
o A 3% growth rate
o Total of $363.0M in additional appropriations over FY2004/2005

PTRC's
o Controls to CY 2005 adjusted PTRC's
o Estimate is $103.8

Child Welfare
o Funds 200 additional caseworkers in both 2006/2007=$24.5M
o Funds $1.0M in training for each year=$2M

Corrections
o Stabilize DOC funding
o Community Corrections=$5M additional over FY 2004/2005

Teacher Pensions at 3% in FY 2006 and 6% FY 2007 over FY 2005 appropriation=$57.9M

ICHIA-$50.2M

DD waiver emergency placement=$49.6M

State employee pay raises=$89.0M

NO Higher Education Capital

Language of Note

• Requires HEC to adopt core transfer library of 70 courses in 12 degree program areas with full articulation between all state supported higher institutions. Plan from HEC by July 1, 2006.
• Bring quasis under normal state agency rules and priorities-allotment, audit, personnel, etc
• Amend existing asset sale provisions to streamline the divestiture process of state properties
• Permits Natural Resources Commission to establish fees, rather than the Department of Natural Resources
• Allows DLGF to withhold a counties PTRC's when unit submits inaccurate or untimely data
• Permits Board of Finance to transfer extra cash to IEDC as currently with the Dept. of Commerce
• Limits PTRC costs to amount appropriated and allows DLGF to adjust payments as necessary
• Allows PTRC's to be withheld from counties behind in delinquent juvenile offender payments
• Requires state universities to offer students a "guaranteed tuition option"
• Fixed rate of tuition over college years