Rep. Gregory W. Porter to Gov. Holcomb: Need help funding your priorities in the state budget? Here’s how it can be done…

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INDIANAPOLIS - If Gov. Eric Holcomb and his majorities in the Indiana House and Senate are having trouble trying to figure out how to fund their priorities in the next biennial state budget, State Rep. Gregory W. Porter (D-Indianapolis) is more than willing to help.

In advance of Thursday’s revelation of the governor’s budget proposal, Porter—ranking Democrat on the House Ways and Means Committee—issued the following statement:

“As we all know, the highest fiscal priority for the Republicans is to preserve as large a state surplus as possible. While they make it sound like it’s impossible to do exactly that and provide the funding needed to increase teacher pay and protect at-risk children protected by the state Department of Child Services (DCS), I am here to tell them that it can be done. Our state isn’t on the verge of going broke, and we do have the resources to fund our pressing needs and preserve a healthy surplus.

“Here’s how…

“Remember that by counting only forecasted revenue – which is what’s done when the state presents its revenue forecast in December – we are providing only a ‘cup half-full’ approach. We are counting only some of the new money we are expected to receive the next two years. For example, the revenue forecast does not take into account money that the state general fund receives from federal leveraging programs for Medicaid nursing homes and that hospitals receive from the HIP 2.0 program. It also doesn’t take into account the millions of ‘new’ dollars that the vendor for the Hoosier Lottery is contractually committed to provide to the state each year.

“If we continue to rely upon the typical amounts of funds that agencies revert back to the state, we can expect to see anywhere from $200 to $300 million each year. Instead of using these figures to puff up the surplus, let’s use them to fund the programs we want.

“In the 2018 legislative session, we passed a measure that provided $75 million from the tuition support reserves in the second year of the current budget to ensure that all public schools were not shorted in funds. Thanks in large part to changes in the kindergarten start date that caused a reduction in the student count, it turns out that only around $1.5 million of that $75 million will need to be used. This means that the tuition support reserve will be saving around $73 million – an amount that equals about a 1 percent increase in tuition support.

“The Medicaid budget is projected to end the 2019 fiscal year with a $44 million ‘surplus.’ Let’s use those funds to offset the state Medicaid line-item appropriation request in the 2020 fiscal year budget. OR it can be added to Medicaid reserve, which is already over $500 million.

“Come to think of it, why do we even have a $500 million Medicaid reserve if it’s not going to be used when we have a need for it? If we were to use a portion of the Medicaid reserve and the $300 million we have reserved in the HIP 2.0 account, we could pay any projected increases in the general fund for Medicaid in the budget, while still maintaining healthy portions of both reserves.

“How about freezing corporate and financial institutions tax rates at current levels, and putting a temporary halt in the drain on our finances? Thanks to the massive tax relief provided by the 2017 federal tax bill, we are seeing these businesses paying taxes at historically low rates, and as it turns out, using the savings to bump up their own profit margins instead of re-investing.

“We are projected to receive around $1 billion from the revised Indiana Toll Road agreement over the next two years. Why not split the proceeds 50-50 between what the governor wants and the Legislature needs? Lawmakers on both sides of the aisle agree that the Legislature should have a role in deciding where these funds should go.

“Here’s an idea. Instead of devoting $20 million from those proceeds for international flights, why not use the funds to expand pre-K in Indiana? We spend about $20 million on pre-K now.

“How about distributing interest from the Next Level Trust Fund every year, instead of every five years? It could provide an additional $30 million in revenue each year. How about keeping our Interstate weigh stations open 24 hours a day, instead of every once in a while? That could help provide up to $80 million in additional revenue.

“Due to a loophole in the Internet sales tax law, Indiana is not maximizing its full potential in collecting revenue from third party sellers or facilitators. I have filed legislation (House Bill 1352) to close this loophole, which could provide another $25 million in revenue on top of the $70 million that is forecast to be received.

“If we are to be legitimate about our efforts to resolve some long-standing problems in the way we choose to fund critical programs, then we must explore all options in achieving that goal. It is something that can be achieved in a bipartisan manner, and I look forward to working with my colleagues to achieve that goal.”

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