Senate approves state budget

INDIANAPOLIS -- The Indiana Senate passed a two-year, $24 billion state budget Monday that Democrats said does not provide enough money for education.\nThe budget, which was approved 29-21, would give schools a 1.2 percent increase in funding in 2006 and a 1.3 percent increase in 2007. But changes to the school funding formula would mean cuts for 129 school districts, Democrats said.\n"There's not enough money in the formula to make it work," said Sen. Vi Simpson, D-Bloomington.\nRepublican Sen. Luke Kenley of Noblesville, chairman of the Senate Tax Committee, defended the $24.2 billion budget and the new school funding formula.\n"We tried to do the best we could for our students," Kenley said.\nWhile the budget allocates the state's funding for two years, a companion bill contains plans to raise money to fund the budget. That bill, which passed the Senate last week, includes a 19-cent tax increase on packs of cigarettes and requires some riverboat communities to give up a portion of their casino taxes to the state. It also includes a funding plan for a new Colts stadium.\nBoth the budget bill and the companion legislation now head to House and Senate conference committees, where compromises can be reached on all those issues.\nSenate Appropriations Committee Chairman Robert Meeks, R-LaGrange, said the budget puts Indiana on the road to economic recovery while providing more money for education and Medicaid than the House's proposed budget.\nMeeks said the Senate plan would erase the state's $645 million deficit and would reduce back payments owed to schools, universities and local governments by about half.\n"We have got to get Indiana's fiscal condition straightened out," Meeks said. "This budget does that."\nThe budget plan includes a 5 percent spending increase for Medicaid and would include a few new restrictions to hold down costs in the government health care program for the poor and disabled. The state has previously projected state Medicaid costs would grow by about 10 percent in each of the next two years.\nThe school funding formula included in the budget would no longer guarantee funding increases for every school district, even those that are losing students. It directs more money to districts with growing enrollments, with supporters saying it makes sense for "money to follow the child."\nBut critics say the decreases to some urban and rural districts with declining enrollment are unacceptable and leave the most needy children with scant resources.\nKenley said he hopes some smaller school districts in the state will talk with nearby districts and consider consolidating to save on administrative costs.