The Indiana House and Senate have each approved their versions of the budget and now state lawmakers will begin the negotiations between the two chambers of the legislature and the governor's office to craft a final bill. Officials report the $34.6 billion budget in the Senate looks a lot like the one passed by the House.

"Our version leaves more money in the reserve," said State Senator Eric Bassler-R, Washington, who serves on the Senate Appropriations Committee. "We have a fair amount of cushion. Now we are all going to sit down and reconcile the differences."

The Senate version left $2.2 billion in reserves compared to the House that had $1.9 billion. In addition, the Senate did not use as much out of the rainy day fund to provide the cash for operations, especially in lowering the amount of money owed for teacher pensions.

"The governor and the House versions put $150 million in the teachers' pension fund from the state's reserves," said Bassler. "We don't want to touch the reserves. We have been about eight years since the last economic downturn and another one is due any time now. We have had good financial times. If we spend down the reserve in the good times there won't be anything left for when times do go bad."

Bassler has not only had his fingers in the budget, as a member of the Senate Education Committee, he has helped craft the Senate's version of the education funding for the coming year. That has 50.4% of every tax dollar in the state going to education. The Senate included an increase of $775 million for pay increases.

One other big draw in the budget will be for the Division of Children Services which could receive up to $286 million additional dollars.

"These will be the main things we will be discussing over the next two weeks," said Bassler. "I still expect the session to wrap up on time around April 24."

The budget takes into account the possibility that next week's state budget forecast may come in slightly lower than anticipated, said Sen. Ryan Mishler, R-Bremen, chairman of the Senate Committee on Appropriations.

"We have provided a robust increase for K-12 funding and TAGs, added a significant amount of new money for DCS, increased funding for school safety and provided funding for rural broadband expansion all while maintaining a balanced budget with strong reserves that will protect us in the event of an economic downturn," Mishler said in a statement.

Increases in teacher salaries would be funded by appropriating $90 million over the biennium for the Teacher Appreciation Grant program, a $30 million increase over the current budget.

Of note, stipends would be offered for teachers deemed "highly effective" or "effective" and who have less than five years of experience.

"We were trying to find a way to reward some of our most effective younger teachers to keep them in the state," said Bassler.

Legislators are still leaving the distribution of increases up to school districts. However, the Senate is earmarking one-third of each district's funding for newer teachers as a way to offer them incentives to stay in the field.

Other teachers who are "highly effective" would receive a stipend at least 25% higher than "effective" teachers.

Gail Zeheralis, Indiana State Teachers Association director of government relations, said that offering teacher pay increases was "moving in the right direction."

By distributing funds through the TAG program, the state avoids adding teacher increases to an annual base. The distribution process also avoids it from coming up in collective bargaining talks.

"The TAG increases, we can't support that. It means that there's more money for teachers. We do understand those increases are non-bargainable items. ... So we hope we can have continued conversation over that element," Zeheralis said.

TAG funds are distributed by the average daily membership (ADM) enrollment count and would amount to $45 per student in 2020. Total ADM funding goes from $6,893 in 2020 to $7,022 in 2021.

Senate Democrats, who are in a 40-10 minority, were hoping to raise teacher salaries by 5%. Many lawmakers balked at the state mandating local school corporations to bump up salaries.

The Indiana Department of Child Services would also receive a funding boost of $243 million in 2020 and $223 million in 2021. The budget requires DCS to contract with the Indiana Public Defender Council to train and pay public defenders for support of at-risk youth and families.

DCS, which has been hit by high turnover among case workers, could also enter into voluntary agreements to resolve family issues before they are brought into court as Child in Need of Services (CHINS) cases.

"We think this is a step towards early intervention that can prevent some of the expenses and some of the trauma that goes on with removing kids from their homes to help them out," Sen. Travis Holdman, R-Markle, said.

During a committee meeting Thursday, Democrats offered an amendment that would have shifted some Indiana toll road revenues into revolving grant and loan programs for long-term infrastructure projects. The amendment failed to pass.

Mishler indicated he had hoped the toll road monies would stay with road projects.

However, Gov. Eric Holcomb has said he wanted to use part of the $1 billion in revenues for renegotiating the toll road lease to expand rural broadband and trail connections, which are included in the Senate plan.

"This money is not just off-the-books money that can be moved around by the governor or the budget director," Sen. Karen Tallian, D-Portage, said.

The Associated Press contributed to this story

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