Indiana could receive $3B from stimulus package

Indiana stands to receive as much as $3 billion if an economic stimulus package backed by Democrats in the U.S. House becomes law, and Gov. Mitch Daniels said it should be spent on Medicaid, education and highway projects.

Daniels said at least $1.5 billion, or about half of Indiana’s share of the proposed $825 billion rescue backed by President-elect Barack Obama, should go to the state’s Medicaid program, which provides health care for disabled, needy, elderly and young Hoosiers.

Daniels also favors earmarking $800 million for education, most of which would go directly to school districts for operating expenses and projects, and $740 million for road and bridge projects – about $340 million to local communities and $400 million to the state for projects that are almost ready to begin.

“It’s an astonishing amount of money,” said Daniels, a former federal budget director for President George W. Bush. “It is one-time money. It will come and it will go in two years or less. It is very important to invest it wisely in one-time expenditures.”

State budget officials prepared the spending estimates based on a congressional summary of the proposal and the formulas currently used to distribute similar funds.

Daniels said Indiana will be better able to use the money to try to stimulate the economy because it’s in a better financial position than many states, so the funds can go toward one-time projects rather than ongoing expenses.

“For states that are dead broke, for states that need all the money just to keep the lights on, maybe in a way they have a simpler set of decisions,” Daniels said. “But we wouldn’t want to trade places. We will have here an opportunity to invest this printed money for our state’s future.”

House Speaker Pat Bauer, D-South Bend, and some other state Democrats want the state to come up with a stimulus package of its own. A House committee advanced one such plan this week that would shift state money, including $1.5 billion in unspent money from the Indiana Toll Road lease, to promote highway projects.

Bauer also wants to tap part of the state’s Rainy Day Fund to create jobs now rather than hoarding money in the bank for the future.

“Everything we can do, we should do. The money we have we should use,” Bauer said. “We’ve got to get focused, and the focus is jobs.”
Daniels opposes such plans, saying the state should keep taxes and spending low to help promote business.

The stimulus plan’s spending guidelines likely will change before the measure becomes law, said Katie Moreau, a spokeswoman for Rep. Baron Hill, D-Ind.
Part of the proposal includes $2 billion for national parks, and $1 million of that total would go to the Indiana Dunes National Lakeshore along Lake Michigan, said Patty Rooney, a spokeswoman for the U.S. National Parks Department.

The money would go toward projects to get rid of invasive plant species that are not native to the park, Rooney said, along with clearing trees and adding room to the habitat of the endangered Karner blue butterflies.