Published: July 01, 2009 10:39 pm      

Herrell votes ‘no’ on budget

Democrat says school funding an issue.

State Rep. Ron Herrell was the only Howard County-area legislator to vote against the two-year state budget passed Tuesday, saying his “no” vote basically came down to school funding.

Just more than a quarter of the state’s school districts will lose funding during the next two years, including three of the four Howard County districts.

“At least in the last budget we got a little increase, but in this budget, almost every one of our schools takes a total decrease over the next two years,” Herrell said Wednesday. “Kokomo alone will lose over $1 million over the next two years.”

Despite Herrell’s vote, the budget passed by a comfortable 62-36 margin in the Indiana House, thanks to Democrat support.

Herrell said House Speaker Pat Bauer, D-South Bend, allowed members of the Democratic caucus freedom to “vote for their districts,” and said he wasn’t sure, going into the vote, the budget would pass.

If it hadn’t, Herrell said, the measure would have gone back to the joint House/Senate conference committee for more work.

The danger, however, was that failure to pass a budget by the midnight Tuesday deadline would have meant a temporary shutdown of state government heading into the holiday weekend.

It would have also meant the state would have had no authority to lend Howard County taxing units more than $12 million, money lost when the former Chrysler LLC defaulted on its 2009 personal property tax bill.

Included in the budget bill was specific authority for the state to lend money to any local taxing unit affected by “the bankruptcy of a motor vehicle transmission manufacturer.”

Herrell said he never thought there was a possibility the budget battle would end up jeopardizing the loan money, which several local officials have already said is absolutely necessary.

“There would have been some consequences, and I wasn’t looking forward to that, but I was willing to take a stand for the children of this community,” Herrell said.

One of the key elements of the bill was a provision, championed by Gov. Mitch Daniels, to allow school funding dollars to “follow the student.”

Instead of cushioning the blow of enrollment losses by calculating funding on a five-year enrollment average, the new budget has a “deghosting” clause that speeds up the funding transfer.

Due to that provision, Kokomo-Center’s 2009 budget of $46.3 million will drop to $45.6 million in 2011. That means the schools will receive $1.16 million less, over the two-year cycle, than they would have if funding had remained level.

Only Western Schools is expected to see a net increase over the two-year budget, with its projected 2011 budget about $5,000 higher than the 2009 budget.

During a conference call Wednesday, Lt. Gov. Becky Skillman defended the budget, noting that most schools in the state will see slight net funding increases.

Only four states, Skillman said, have been able to increase school funding as much as Indiana, and only eight states are expected to have reserves comparable to Indiana.

“And more than 20 states have raised taxes to fill budget gaps,” she said.

In the Indiana budget, the only tax hikes are for specific local requirements, such as the Capital Improvements Board in Indianapolis.

A new tax capture district in downtown Indianapolis will provide up to $8 million per year for the CIB, and local innkeeper’s, auto rental and ticket taxes will go up.

“I couldn’t justify voting for that when you’re cutting all this money to our children,” Herrell said. “It’s going to be a continuing problem. [The CIB] will be back to us again for more money, I’m sure of it.”