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'Flatline' In Next Indiana State Budget, Despite Cautious Optimism From Fiscal Leaders

Brandon Smith
IPB News

There will likely be little to no new money for schools, state programs and agencies in the next Indiana state budget. Lawmakers predict a “flatline” in the budget’s first year after the latest revenue forecast.

The new forecast projects Indiana will have about $360 million in increased revenue over the next two-year state budget, compared to the current budget. That would be a boost of barely one percent.

And new Medicaid costs will likely eclipse that increase. Sen. Ryan Mishler (R-Bremen) said that means the next budget will have to be “cautious.”

“It is basically a flatline the first year, so we’ll have to be very careful the first year," Mishler said. "The second year, if the economy continues to grow like they’re anticipating, we could have more revenue to work with.”

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Mishler said that likely means K-12 school funding won’t go up in the new state budget.

“A flatline is a win, even in K-12, when other states are making drastic cuts. So, in Indiana I don’t think you’re going to see a cut in K-12 like other states,” Mishler said.

READ MORE: School Financial Managers Say 2021 Legislative Session Will Make Or Break Their Budgets

Still, state leaders say the new forecast is better than expected – especially when it projects that Indiana will finish its current budget with a surplus of $2.3 billion.

Rep. Tim Brown (R-Crawfordsville) said, if that’s the case, lawmakers will look to spend some of that money.

“We’ll be looking at, are there one-time things we want to have in this government and what’s an appropriate reserve amount?" Brown said. "We need a reserve amount for the next time we are in a situation like this.”

The budget won’t be finalized until at least late April and state fiscal leaders agree that a lot can change before then. That includes potential new federal COVID-19 relief dollars and the impact of the vaccine on the economy.

Contact reporter Brandon at bsmith@ipbs.org or follow him on Twitter at @brandonjsmith5.