Republicans open to governor’s proposed budget

By: - January 6, 2023 6:30 am

Sen. Eddie Melton, right, and Sen. Chris Garten talk before the budget committee while Sen. Ryan Mishler smiles in the background. (Whitney Downard/Indiana Capital Chronicle)

Republican budget writers were receptive to – but not overly enthusiastic about – Gov. Eric Holcomb’s proposed budget that was presented to the State Budget Committee on Thursday.

Previously, lawmakers were skeptical about meeting agency funding requests, especially following a forecast predicting a “mild recession” in early 2023. But they appeared more optimistic about spending on Thursday, though the governor’s budget calls for increased spending in education, state trooper pay and economic development of $5.5 billion

“If you look at the overall spending, it does seem high. But until I break it down into individual buckets, it’s hard to say,” Sen. Ryan Mishler, R-Mishawaka, said, calling the proposal “feasible.” 

Misher, who chairs the Senate Appropriations Committee, and his House counterpart Rep. Jeff Thompson, chair of the Ways and Means Committee, both said they needed more time to review the specifics.

“They spent the past six months putting this together and we want to take some time to analyze what’s before us and improve what’s good (to) make it better,” Thompson said. 

“Blank checks” for economic development, not public health

Democrats questioned the state’s seemingly endless support of the Indiana Economic Development Corporation (IEDC), which received additional dollars and  flexibility in last year’s session. 

The proposed budget included massive new dollars for the IEDC, including $500 million for another round of regionally based grants, continuation of a $300 million “deal closing” fund and a new $150 million revolving fund for site acquisition. 

Rep. Greg Porter, D-Indianapolis (Courtesy Indiana House Democrats)

As a quasi-public agency, the IEDC isn’t beholden to the same transparency rules as other public entities but claims credit for more than $22 billion in private investments in recent years, including a Stellantis plant in Howard County and a new innovation district in Boone County. 

“We just continue to give them a blank check… to me, there isn’t any accountability,” Rep. Greg Porter, D-Indianapolis, said. “I don’t mind us investing in the economy; I don’t mind us trying to create jobs. But what are the results of that money?”

Mishler said that he didn’t have local opportunities after he graduated from college and had to leave the state to pursue his career. After eight years, he could finally return to Indiana and hoped that continued investment through the IEDC would prevent the “brain drain” of other college graduates.

“You’ve got to have opportunities for these kids to stay and those investments in READI, the IEDC money, that’s what provides the opportunities for the jobs for these kids to finish school and stay here,” he said. 

Something that wouldn’t be getting a “blank check?” Public health. 

Indiana ranks 47th in the nation for its public health spending of $55 per Hoosier compared to the national average of $91. Of Indiana’s 92 counties, 88 spend less than $23 per capita

But Mishler remained skeptical about spending, even as stakeholders amended their initial ask down from nearly $250 million annually to $120 million in the first year followed by $217 in the next year.

“I think we have to take a hard look at the breakdown of that money,” Mishler said.

Funding for corrections vs funding for education

Indianapolis Democrat Sen. Fady Qaddoura, the former chief financial officer for Indianapolis, questioned why the state’s Republican leadership continued to use the state’s reserves to fund capital improvement projects, rather than investing in education. 

“Every student in every classroom that we miss (when it comes to) making investments, I think, is going to cost us hundreds of millions of dollars,” Qaddoura said. 

Sen. Fady Qaddoura, D-Indianapolis. (Courtesy Indiana Senate Demorats).

Holcomb’s proposed budget includes $1.25 billion more for projects with cost overruns due to inflation, on top of the initial funding for those projects from the previous budget cycle. For example, the Westville Correctional Facility was projected to cost $400 million but ballooned to $1.2 billion, an $800 million increase. 

The state could use its AAA bond rating to secure financing another way for projects like the prison and use its cash to invest in K-12, Qaddoura said. He noted that even with an overall 8% increase, that amount barely keeps up with inflation.

“If I were setting priorities, I would be spending that $800 million on education and not a prison,” Qaddoura said.

But Mishler opposed using bonds, instead emphasizing his aversion to debt. According to the proposed budget presentation, the state’s overall debt burden has decreased by 31% since Holcomb took office.

“If we have the cash, why not pay for it in cash? I know interest rates are going up too; I don’t know if I want to bond right now but I think we’ve done a good job of paying off our debt and I don’t want to increase it,” Mishler said. 

Mishler pushed for a continued focus of extra monies on the pre-1996 Teacher Retirement Fund, the state’s largest unfunded liability set to be paid up by 2030. That would free up an extra $1 billion for the budget and could leave the state with the flexibility to cut income taxes, Mishler said.


The 2023 legislative session starts on Monday.

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Whitney Downard
Whitney Downard

A native of upstate New York, Whitney previously covered statehouse politics for CNHI’s nine Indiana papers, focusing on long-term healthcare facilities and local government. Prior to her foray into Indiana politics, she worked as a general assignment reporter for The Meridian Star in Meridian, Mississippi. Whitney is a graduate of St. Bonaventure University (#GoBonnies!), a community theater enthusiast and cat mom.

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