House budget has more money for roads

From AP and staff reports

INDIANAPOLIS -- The Indiana House approved a $30 billion budget Monday night that includes $700 million more for roads and schools than was originally sought by the governor.

The proposed $500 million boost to the state Motor Vehicle Highway Account (MVHA) would mean increased road money flowing to localities such as Putnam County, a move county officials would welcome.

The House voted 67-29 along party lines for the two-year budget. It now moves to the Senate.

The House budget adds $200 million for education and $500 million for roads to the proposal submitted by Gov. Mike Pence last month. Pence also wanted a 10 percent cut to the personal income tax, which would have cost $500 million a year, but lawmakers left that out of the House bill.

Although outnumbered 69-31, Democrats argued that the budget still doesn't spend enough on education and continues to shift more burdens on the middle and lower class.

"Look at this budget, it's not a good budget, it's not a sound budget, it's not a budget for all," said Rep. Greg Porter (D-Indianapolis) the top Democrat on the budget-writing House Ways and Means Committee.

But the lead budget writer in the House countered that the budget restores much of the funding that was cut during the last few years.

"The recession, the Great Recession, we have lived through something in our lifetime I hope we never go through again. Taxpayers didn't have it in their pockets to give to schools, it just wasn't there," committee chairman Rep. Tim Brown (R-Crawfordsville) said.

The Republican noted that the $6.7 billion the budget spends on education is the most allocated in the state's history. The budget covers fiscal years 2014 and 2015.

With an eye to his constituency in west-central Indiana, Rep. Jim Baird (R-Greencastle) made particular note of the budget proposal's increased investment in infrastructure as well as its plan to phase out the state's inheritance tax.

Increased road and bridge money is raised through taking "off the top" expense away from MVHA and dedicating 20 percent of the state gas tax to the fund.

Together these proposals permanently increase the infrastructure funding by $250 million per year.

"Building, maintaining and repairing our roadways and bridges are some of smartest investments we can make in our state's future, and by increasing transportation funds in the budget and as the Crossroads state, our economy will continue to see the economic benefits of this," Baird said.

The state and local split of this money would be approximately 53 to 47 percent. It remains unclear how much money this would mean for individual local agencies, such as the Putnam County Highway Department.

In 2012, Putnam County had a $300,000 budget for roads, which did not even scratch the surface of the county's road needs.

In the end, the county commissioners and council worked together to find an additional $800,000 for road money. However, some of these sources are not available every year.

Putnam County Commissioner Nancy Fogle estimates the department will need at least an additional $615,000 in 2013, so any more money from the state will help the county going forward.

Baird also praised the expedited phase-out of the inheritance tax in the bill, which would eliminate the tax by Jan. 1, 2018, four years sooner than originally proposed.

"Farmland makes up a majority of west-central Indiana and the death tax has a direct effect on them (farmers)," Baird said. "We want to encourage more Hoosier farmers to stay in Indiana after they retire and to be worry free on those they pass their family farm on to."

By pushing the date forward four years, Hoosier taxpayers would save nearly $300 million, Baird said in a news release, keeping more farms and small family business in the hands of Hoosiers.

Republican leaders have said they are not ruling out the tax proposal that Pence made the centerpiece of his run for governor last year and his top legislative priority in his first year in office.

Pence has said he is disappointed by the decision to leave the tax cut out of the budget but is optimistic he can win his signature proposal before lawmakers wrap up work April 29.

Leaders in both chambers have held some cards tight in the ongoing budget negotiations, saying updated tax collection forecasts due in April will give them a better idea about what the state could afford over the next two years.

Budget writers are working with a roughly $500 million budget surplus each year and roughly $2 billion in cash reserves left by former Gov. Mitch Daniels. But they are also facing pressure from many, including local and county leaders who slashed budgets during Daniels' tenure, to restore spending cut during the recession.