O'Bannon proposes budget

Public funds are tight in Indiana.\nAnd under Governor Frank O'Bannon's proposed budget, state colleges would take the biggest hit.\nIn the first act of the legislative session, O'Bannon submitted his $21 billion two-year budget Monday. Based on forecasts of a cooling economy and shrinking state reserves, it holds spending sharply in check. Legislators from both parties expressed disenchantment. \nIn the proposal, operating expenses for state colleges would be flat-lined during the next two years, meaning no increases in funding. With the inevitable inflation, tuition would rise.\n"It's the most disappointing part of this," said state Sen. Vi Simpson, D-Bloomington.\nLacking details, University officials hesitated to criticize O'Bannon's proposal.\n"The great gains IU has made in recent years have been made possible in large part by the foresight of the legislature and the executive branch," IU President Myles Brand said in a statement.\nThe University has received $50 million in grants for high-tech research during the past two years.\nO'Bannon's budget is only a suggestion, which lawmakers have already brushed off.\nThe budget makes good on all of O'Bannon's re-election campaign promises, such as $130 million in spending on public schools. State aid to K-12 schools would be increased by 2 percent across the board. It has risen by an average of 6 percent in past years, according to public records.\n"It's a shame," said Rep. Mark Kruzan, D-Bloomington. "Once again, higher education is treated differently than K-12 education."\nThe budget dips more than $200 million into the "Rainy Day Fund," which O'Bannon has frequently said should be maintained at $1.1 billion. Every available tax dollar would be spent, and the budget contains a controversial plan to use more than $400 million from gambling revenue. It would also tap into Indiana's share of the federal tobacco settlement.\nLegislators criticized such funding sources as unreliable. Indiana's windfall from the tobacco settlement hasn't yet been announced, and gambling money hasn't been used to run state government since the recession of the early 1990s. And it pays for projects in lawmakers' districts, such as paving roads. \nBut the governor's office defends the move as necessary, saying the economic slowdown will take a toll on government revenue. State Budget Director Betty Cockrum called the governor's proposal "a starting point" for budget negotiations likely to stretch on until April.\n"We continue to see signs of a slowing economy," Cockrum said, according to The Associated Press. "We are faced with some hard choices."\nBut given the budget's lack of political viability, legislators plan to start from scratch.\nRep. Pat Bauer, a South Bend Democrat who chairs the budget-crafting House Ways and Means Committee, said he intends to draft his own starting-point budget. \nHe last scuttled a governor's budget in 1993, during the height of the recession. Usually, the committee approves it straightaway for consideration in the House.