Budget, Education & Roads Part Of Legislative Preview
Budget, Education & Roads Part Of Legislative Preview
Posted
David Slone-dslone@timesuniononline.com
Budget, Education & Roads Part Of Legislative PreviewWINONA LAKE - Many organizations want money from the state’s surplus, but Indiana Sen. Ryan Mishler said there’s not as much available there as everyone thinks.
Mishler, who represents District 9, was one of three legislators at Monday morning’s 2023 Legislative Preview at Westminster Hall, Winona Lake, hosted by the Kosciusko Chamber of Commerce. He was joined by state Reps. David Abott, District 18, and Craig Snow, District 22. Sen. Stacey Donato, District 18, was unable to attend due to illness.
“So this is a budget year, so that’s kind of a full-time job for me being the Corporations chairman, the State Budget chairman right now. So the first thing I want to do is set something straight,” Mishler stated. “So you hear us talk about surplus all the time. So, I’m going to define the surplus because it’s a little deceiving. Everyone’s coming and asking for more money, more money. I think we created bad behavior with the Covid money because we gave so much away, now everybody wants more. And it’s gone.”
He said the state supposedly had $6 billion in reserves, and then down to $4 billion after the taxpayer refund, which he voted against.
When they say the state has $4 billion in reserves, Mishler said the state really only has about $1.7 billion.
“For my caucus, I broke this down into categories because one category is the Medicaid Reserve Account, which we have to have to backfill Medicaid when we’re short, so we can’t touch that, and that’s $500 million-$600 million,” Mishler said.
Then there’s the State Tuition Reserve Fund for when the state is short so K-12 education doesn’t take a hit, and that’s another $600 million-$700 million.
Thirdly, there’s the Rainy Day Fund, which is only touched in a recession, and that’s another $900 million.
“So we have three buckets that we don’t touch. You take those away, we’re down to $1.7 billion,” Mishler explained. “So we can say we have $4 billion, and that is true, but the majority of that we don’t touch because they’re for emergency situations, not to give away in taxpayer refunds or what have you.”
In a bill that was passed this last summer, a billion of that now goes into the Pre-96 Pension Fund, “so that’s going to take us down to $970 million,” Mishler said.
After the state gave taxpayers $1 billion back, Mishler said another reason he voted against that was because in the 2021 budget there were a bunch of capital projects. “We can’t do them because of inflation, overruns so we’re a billion dollars short to do the projects from the ‘21 budget. So when we start the ‘23 budget, we have to put a billion extra in there to cover the capital projects for 2021,” Mishler said.
He said, given all that information, “we don’t have that much to work with when we craft the budget.”
Gov. Eric Holcomb has a public health commission that he wants $240 million for, Mishler said. Mishler doesn’t think the state has $240 million to spend and that the Indiana Department of Health could spend that much in one year.
The administration is also asking for significant pay increase to keep track with increases in the private sector, Mishler said, which is “a couple hundred million dollars.”
The Regional Economic Acceleration and Development Initiative (READI) received $500 million last time, Mishler said, and Holcomb wants another round though Mishler said Holcomb hasn’t said what his plan is for that. The governor has to have his budget before the budget committee by Jan. 9.
The Indiana Economic Development Corporation (IEDC) will be asking for more money, but Mishler praised the work Secretary of Commerce Bradley Chambers does and said, “He gets a pretty good return on the investment for the money that we give to the IEDC.”
Everyone pays a 911 fee on their phone bills. The Behavioral Health Commission wants more money by increasing the 911 fee for mental health.
Education
Charter schools wants a share of the property tax dollars. Mishler said there’s some legislation already in place where it’s optional, but the charter schools want it to be mandatory. Kosciusko County currently doesn’t have any charter schools.
Meanwhile, he said, voucher school groups are asking for about $300 million. They want universal vouchers so that any student that is paying tuition in a private school would get a voucher to go to school.
Abbott said, “I can tell you, just from (Organization) Day and (what) the speaker kind of laid out, some of the agendas of what we want to accomplish, not a lot of detail, but education is going to be one of the high priorities on his list.”
He mentioned the lower test scores from during the Covid pandemic and how curriculums and school programs have been set up for college-bound students and less emphasis on workforce/career-oriented training.
“So, what we want to do is look at that a little bit more in-depth so that we can get credits for those type of classes that can be applied - I believe what he is looking at is using their participation in apprenticeships to get credit in high school,” Abbott said, adding that they’ll be looking at shifting the curriculum so it’s geared more toward getting people out into the workforce.
School board elections currently are non-partisan. Abbott said there may be a movement to change that so they’re partisan in the future. He hasn’t heard a lot about that yet, but encouraged everyone to “keep their ear to the ground” on that.
Snow hopes to be on the Ways and Means Committee, which Mishler is encouraging and lobbying for, but the announcement of who is on what committee hasn’t come out yet.
Snow said he has a bill in the works to try and recoup some tax dollars so instead of going to the state they stay in Kosciusko County.
The other bill Snow has been asked to carry by the speaker of the House is a Department of Local Government Finance bill, otherwise known as the Christmas Tree bill.
“Anything that doesn’t get in the budget, they come to me and ask if they can put it in my bill. At least, that’s what happened in the past,” Snow said, noting it’s a very large bill.
Gas & Roads
During a question-and-answer session, the legislators were asked about gasoline sales tax and road repair dollars.
Mishler said the sales tax on fuel is a formula based on the price of fuel a month prior.
“So, just like any sales tax you pay on any item, if you pay more for an item, you pay a higher sales tax. But fuel, because it changes so often, it’s based on the month prior,” he said.
In November, the sales tax was about 23.1 cents, Mishler said. This month, it went up to 23.3 because gas prices were high enough. At one point, he said it got up to 29.
“But, as gas prices go down, so does the sales tax. It’s one month behind,” Mishler said. “So when people say the tax goes up, yeah, it’s based on the price of the fuel.”
One thing the state legislature did this summer was to cap the tax at 29.5 cents. “So if the prices go so high, there’s at least a protection in place,” Mishler said.
The “road people” didn’t like that cap, he said. “But I said, by that point we’re going to bring in so much more revenue for the roads, it’s not going to cut them short.”
Like everything else, the cost for road repairs is costing more so INDOT (Indiana Department of Transportation) is having to make adjustments. He said the state legislature doesn’t tell INDOT what roads to address.
“They do their budgeting, but it’s kind of a double-edged sword. Their costs are going up, but they will have a little more revenue from the increase in the gas tax, but not enough to cover their overruns, so they’re going to have to adjust for that. That’s all dedicated funds to roads, so we don’t budget for roads in the budget. It’s dedicated funds based on the fuel tax and the sales tax,” Mishler said.
Abbott said he looked into what the surrounding states’ gas taxes are.
“They don’t vary that much from state to state as much as you would think. A few cents here and there, but what seems to vary, too ... it’s not a 40-cents difference, but the price of gas will be 40 cents cheaper if I go to Van Wert, 35 cents, every time,” Abbott said, adding that there’s probably a correlation between prices and proximity to a refinery and trucking costs. “... The taxes aren’t, on a gallon of gas, that much different between the five states I looked at - Pennsylvania, Ohio, Michigan, Indiana, Illinois.”
On counties’ motor vehicle highway funds, which are supported by the taxes, Abbott said a 2017 bill had a major impact. “Part of that, what it did, is it dictated the MVH funds going to local communities had to be split 50-50 between administrative and basically asphalt roads, bridge repair and preservation,” he said. “Fifty percent had to be accountable for roads and improvement and 50% would be administrative, which would be repairs on trucks, snowplowing and that led to the issue we have right now where our northern counties have higher costs in certain areas versus southern Indiana.”
He said the legislature is working on something now that would change that 50-50 to 60-40 to allow for more flexibility for northern states to address things like snowplowing, as an example.
Mishler said, “What happened when we did that in 2017, they wanted 100% to go to roads. And being from the north, I’m like, ‘You guys don’t understand - salt! You don’t know what salt is. You don’t know what snowplowing is. ... But that’s a common occurrence for us.’ So I tried to explain to them that we have costs in the north that they don’t have and that would be salt and snowplowing basically.”
So they agreed to the 50-50, and Mishler thought that was a good starting point. It lasted a couple years.
“I’ll admit, I’ve met with (Kosciusko County Council President) Sue Ann (Mitchell) and folks here in the county and they’re struggling with that 50-50,” Mishler said.
There was a bill to make it 60-40, but he said the road construction groups came down on it.
“I think the easiest thing to do, instead of switching to 60-40, is slide, maybe include plowing and salt in the one 50, take it away from administrative and slide it over to the other 50. I think that would help us,” Mishler said.
