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Unfinished Budget Business Forces Special Session in Indiana

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The funding outlook for Indiana schools remained uncertain late last week as partisan disputes prevented the legislature from reaching a budget agreement before the end of its regular 1991 session.

After lawmakers failed to resolve lingering differences in the predawn hours last Wednedsay, Gov. Evan Bayh said he would call a special session to complete action on the budget as soon as--but not before--an agreement could be forged by legislative leaders.

Mr. Bayh said a budget deal could be worked out within 48 hours. If that timetable holds up, the special session--which the Governor said should last only one day--could be wrapped up as early as this week.

But observers noted that the complexities of Indiana politics--where Republicans control the Senate and Democrats run the House, both by narrow margins--could bog down debate.

At stake for local schools is some $210 million more in tuition support than was proposed in an earlier version of the budget backed by the Governor and passed by the House. (See Education Week, March 27, 1991.)

The administration had sought to "straight line" school spending by shifting more of the burden from the state to local school districts. But the plan was roundly criticized by education groups, which argued that it would trigger teacher layoffs and cuts in services.

Under a budget proposal placed on the table by House and Senate Democrats shortly before the regular session wound down last week, school aid would rise by about 4 percent in the first year of the 1992-93 biennium and 3 percent in the second.

While tuition support--the basic form of state aid to schools--would increase only by about 1 percent in each of the two years, the balance of the increase would come from drawing on various cash-reserve funds and from revenues made available by temporarily suspending a motor-vehicle excise-tax cut.

The overall rise in school aid also would reflect an average local property-tax increase of about 6 percent statewide.

Partisan Impasse

Although the Senate never passed its own budget bill, House and Senate conferees had begun working toward an agreement in the waning days of the session.

But negotiations on the overall budget and the education component broke down, with each party blaming the other for the impasse.

John Grew, a fiscal analyst for Representative B. Patrick Bauer, the South Bend Democrat who chairs the House Ways and Means committee, said Republicans never made any formal counteroffer to the Democrats' budget proposal.

But Republicans contended the plan contained some of the elements they had objected to earlier and argued that they did not have enough time to review the final proposal.

The budget debate was also sidetracked by a dispute over Congressional district boundaries, which may have to be resolved by a special commission or in court.

David Dawson, a spokesman for Mr. Bayh, said the Governor wasmeeting with legislative leaders late last week to work out a budget pact.

Mr. Dawson predicted that "the amount of support for schools will be very close to what was in the Democratic proposal."

"There is general broad agreement that there should be a slight increase in tuition support," said Don Ernst, the Governor's executive assistant for elementary and secondary education.

"The disagreement is on where it comes from," said Mr. Dawson, who noted that the Governor has adamantly opposed moves to draw funds from the state's "rainy day" and tuition-reserve funds.

"The Governor feels strongly that the state needs to maintain an adequate cash reserve," he said.

Holding Devastation at Bay

Education advocates, meanwhile, said the plan offered by Democratic leaders would go a long way toward easing their earlier concerns.

"The immediate devastation that loomed over schools would be held at bay," said Norma Kacen, a coordinator of governmental relations for the Indiana State Teachers Association.

If the plan to forestall cuts and slightly increase aid prevails, she added, "it would be a tremendous tribute to the steady and continuing pressure community groups have brought to the legislature."

In other action, the legislature turned down proposals by Governor Bayh to bolster workforce-preparation programs and to launch a pilot project to ease state regulations and foster innovation among 30 schools.

But legislators approved the Governor's Step-Ahead proposal, which calls for comprehensive preschool, child-care, and health services funded chiefly through existing federal and state sources. The bill directs about $10 million in state aid toward the effort over the next two years, including $4 million in new funds and $6 million from existing funds geared toward at-risk students.

Mr. Bayh's "4 R's" proposal for technology grants to help children in the early grades master basic skills also passed, but its funding is in limbo until the budget dispute is resolved.

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