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Ind. Lawmakers Override Veto Despite Warning on School Funds

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In a special session bogged down by what some termed Washington-style "gridlock,'' the Indiana legislature passed a budget that could leave schools strapped for cash next winter.

Citing too little money for schools as one of his objections, Gov. Evan Bayh vetoed the fiscal package that was passed just a few hours before the start of the new fiscal year July 1.. But his veto was overriden by both chambers.

The Republican-controlled Senate had fended off attempts by Mr. Bayh, a Democrat, to raise money for schools and other services through a tax on hospital revenues or a cigarette-tax hike.

The Governor backed a budget passed by the Democrat-majority House, which increased education spending by an average of 4 percent in each calendar year of the new biennium and guaranteed that no school district would receive less than a 2.5 percent increase.

The measure finally approved would provide an overall increase of about 3.3 percent a year. In addition, it includes a new school-aid formula that takes steps to level spending among rich and poor districts.

The budget also contains a proposal to allow riverboat gambling, which drew bipartisan support.

Education lobbyists said the school-aid increase was too small to be of much help to poorer schools.

"As a method of distributing the money, it is a significant step forward--the problem is the money available to distribute is insufficient to the need,'' said Norma Kacen, the government-affairs coordinator of the Indiana State Teachers Association.

"This was clearly the nastiest, most painful legislative session that I personally have witnessed'' in 15 years, Ms. Kacen added.

Potomac-Style Deficit

In his June 30 veto message, Mr. Bayh said the budget "forces dozens of school districts to operate during the next two years with very meager funding increases'' and "relies more on increased property taxes than on increased state support, thereby shifting the split in the funding of local schools away from state appropriations to local property taxes.''

Mr. Bayh also warned that the budget reduces state reserves to all-time lows and will "require massive spending cuts in every part of state government to enable the state to pay its bills on time.''

The two-year deficit of $370 million projected under the budget "is of a magnitude seen on the banks of the Potomac,'' Governor Bayh said.

Last week, Mr. Bayh asked all state agency heads and the state budget director to recommend a total of $160 million in spending cuts.

A spokesman for the Governor said last week that if such cuts are not made, the state's poor cash-flow situation may make it impossible to make school-aid payments on time next winter.

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