Senate to redraft budget plan

State revenue fell $102.6 million short of projections for February, according to the Indiana State Budget Agency. The shortfall puts the nail in the coffin of the two-year, $21.1 billion budget passed by the Democrat-controlled House. \nThe state Senate's top fiscal leader said his committee will craft a much leaner budget, which would mean less funding for K-12 and higher education. \n"We have to work together during the budget crunch," said Sen. Lawrence Borst, R-Greenwood. "But we're not going to spend more than we have coming in."\nThe chairman of the budget-writing Senate Finance Committee didn't specify whether he would freeze higher education funding, as Gov. Frank O'Bannon proposed in his budget plan earlier this year. But he made it clear that public universities won't receive the 3.8 percent increase included in the House version.\n"If the economy keeps going the way it's going, it wouldn't be sustainable," he said. "We'll have to trim wherever we can."\nUniversity officials have their fingers crossed.\n"We understand state budget-making concerns," said IU spokeswoman Susan Dillman. "But we still have to spend on higher education, which is important to the state's economy. We're hopeful that enough revenue will come in, but shortfalls don't lessen the need." \nThe Senate version, which Borst hopes to send back to the House for negotiation by late March, will be closer to O'Bannon's original budget proposal. Borst said he would also provide funding to staff and operate two new correctional centers -- a men's prison in Miami County and another for special needs inmates in New Castle.\nBorst also said he would put more of a priority on Medicaid, an entitlement program.\n"When the bills come, they have to be paid," he said. "We can't lowball Medicaid. The governor's proposal is closer to what it should be."\nRep. Patrick Bauer, D-South Bend, drafted the budget that made it through the House with lopsided bipartisan support. He defends it as fiscally responsible.\n"The budget passed by the House is the product of a bipartisan awareness that the economy is slowing down," he said. "With those circumstances staring us in the face, it is imperative to craft a budget that works within existing revenues and manages to find sufficient funding to support important public programs like education, health care and human services."\nBauer's budget doesn't rely much on revenue projections -- it draws heavily from gambling money and the state's share of the tobacco settlement, among other alternative sources.\nStrongly opposed to a tax raise, Borst said he has "no problem" with using gambling taxes. But, unlike Bauer, he refuses to draw funding from the state's "Rainy Day Fund" or Medicaid reserves.\n"We can't expect a steady stream of revenue," Borst said. "But we don't want to open the door on using the Rainy Day Fund as a way out."\nA December forecast set state revenue for this fiscal year at $9.39 million, or 2.7 percent more than last year. The state is already $153 million behind projected revenue to date, according to the State Budget Agency.\nLawmakers must adjourn the 2001 regular session by April 29. If they haven't finished the budget by then, O'Bannon will convene a special session, which he has been forced to do in recent years.