Budget proposal would increase education, cut Medicaid funding

Indiana House of Representative Democrats revealed a two-year budget Monday that would increase spending for education but cut Medicaid funding. The bill, which gets part of its funding from the new keno casino game, would place nonviolent criminals into faith-based rehabilitation programs instead of providing new beds for them at the Miami and New Castle correction facilities.\nThe House Ways and Means committee passed the bill Monday in a 17-11 vote. The vote rejected a $22.9 million budget proposed by Governor O'Bannon that would have funded numerous Medicaid programs and added 1,500 beds to correctional facilities.\nInstead, the Democrats plan to increase spending on K-12 education by 2 percent each year and higher education by 1 percent. The money for these increases comes from a $490 million cut in Medicaid funding, using $33 million in increased taxes paid by gambling establishments and $45 million revenue from the implementation of keno in state establishments such as casinos and taverns.\nKeno is similar to bingo, where a person chooses 20 out of 80 numbers to match a randomly generated series of numbers. The state would also pay $17.50 per day per offender to faith-based programs to care for nonviolent offenders.\nDemocratic Representative and Ways and Means Committee member Ron Herrell, an IU graduate, commended the proposed budget.\n"The legislature is hoping to hold down tuition increases if possible without raising taxes," Herrell said. "I think this budget will do that and maintain a quality education at IU and other higher educational institutions."\n"It is the goal of every legislator to not have any tax increases," Herrell said. "This bill will do that and give the state a balanced budget."\nState Budget Director Marilyn Schultz said that although the governor's budget would freeze any increases in spending, the state has not cut education funding for decades. The proposed Democratic budget would have funds directed towards construction projects at IU, Purdue and IU-Purdue University Indianapolis.\n"Obviously, everyone would like to give more money to higher education," Schultz said. "IU is expected to play a very large role in the economic development in our state. That higher education has not been cut in Indiana during this time of heavy recession or since World War II shows how the governor and the legislature place priority on education and higher education."\nBuilt into the Democratic budget are funds for new buildings at IU and IUPUI directed towards science and life sciences, both which are an integral part to the governor's plan to revitalize the Indiana economy, Schultz said. Also proposed was allotting $200 million for K-12 education, additional money to student financial assistance and funding for bonding projects for universities. \nRepresentative Larry Buell (R-Marion), a member of the Ways and Means Committee, said the effects of taking the funding out of the health programs will be felt more in the long run.\n"It wouldn't immediately affect Medicaid, but it would take money out of the fund for later years that would pay for programs such as Medicaid and HoosierRx," said Buell.\nThe state's tobacco control fund was initially created so the majority of the settlement money would go toward health initiatives. The proposed budget cuts Medicaid and gives it no funding increase. Since Medicaid is an entitlement program, a possibility the budget could be overspent exists, said Buell.\nThe HoosierRx and Hoosier Healthwise programs could also be affected. HoosierRx is a prescription drug subsidy program for low-income seniors and Hoosier Healthwise provides for children in poor families. Last week, the legislature supported an amendment which would set aside $283 million for the project, but the proposed Democratic budget would leave only $164 million.\nWednesday the House of Representatives will go through the second reading of the bill, where it can be amended. At its third reading, the House will vote on the budget. If it passes, the bill will be heard in the Senate with a vote possible in March. Buell said the issue should be resolved in late April.