By Jessica Wray
The Statehouse File
INDIANAPOLIS – Schools and state fair victims would get more money under a proposal a key House fiscal leader said he will present on Wednesday.
House Ways and Means Chairman Jeff Espich, R-Uniondale, said the spending will be part of a larger plan to overhaul the state’s automatic taxpayer refund program, which the General Assembly put in place last year.
“It’s a great idea,” Espich said of the taxpayer refund law Tuesday. But “it’s much too complex.”
Espich said he’ll add the new language to House Bill 1376, which will be considered in the Ways and Means Committee on Wednesday.
The plan would boost funding for kindergarten by doubling the money that districts receive for offering full-day programs.
Espich also wants to make another $5 million available to pay victims of the stage collapse. That would also double what’s available to the dozens of victims and their families.
He said the spending is possible largely due to a mistake the Department of Revenue made in transferring money from a holding account to the state’s main checking account.
Because the mistake went undetected for several years, the state has $288 million in one-time funds from the years when the money had not been appropriately transferred.
The discovery of the error also means the state will receive about $100 million annually from corporate tax revenues more than it had originally projected.
Espich said his new spending proposal would allow for about $5 million more for the victims of the state fair stage collapse and their families.
State law capped the state’s liability from the stage collapse at $5 million, which has already been awarded. But that cap meant the amount paid to those who died and were injured did not reach the individual limits allowed by state law.
The families of those that died in the collapse received $300,000 each. Without the overall liability cap, the state law would have allowed those families to receive as much as $700,000. Under Espich’s new proposal, the state could award those families the full amount they might have otherwise received.
That would cost about $2.8 million.
Espich said those who were injured in the state fair collapse would also be awarded additional compensation.
“I think what we can do is to make sure that all of these individuals receive at least the maximum amount of money allowable under our law in the state of Indiana in terms of an individual cap,” he said.
The state would pay the stage fair victims using money from the one-time, accumulated funds.
“Only a fool would build that money into their base spending,” Espich said.
The state would use the ongoing, newly discovered tax revenue to provide additional money to schools.
Espich’s plan provides an additional $80 million for full-day kindergarten.
Full-day kindergarten is now financed through a grant system because it is not a requirement in K-12 education. The proposal increases the grant for each child from $1,200 to $2,400.
“On average, this amount of money will fully fund – I want to be careful with my words – will fully fund the amount of money that has been spent on full-day kindergarten for each child in the state of Indiana,” Espich said.
Senate Appropriations Chairman Luke Kenley, R-Noblesville, said he thinks adding funding for full-day kindergarten makes sense and “is a legitimate thing to do.”
“Although we normally don’t make any appropriations during a non-budget year,” Kenley said, “I think it’s a fruitful idea to look at K-12 education, which is kind of everybody’s highest priority.”
Kenley has a bill currently in the Senate that deals with the automatic taxpayer refund the General Assembly passed last year. The bill modifies the refund trigger. On Tuesday, Kenley’s bill passed 36-14, and will now head to the House for a committee hearing.
Espich’s bill, though, also makes changes in the state’s automatic taxpayer refund program.
Under current law, the refund program takes effect if the state’s reserves equal at least 10 percent of the next year’s spending. That is expected to be the case at the end of the current fiscal year.
The law calls for half the excess to be used for refunds to taxpayers and half to go into a pension stabilization fund.
Espich’s proposal would keep the 10 percent trigger in place but would change the payout by prioritizing taxpayers. The plan would spend the first $200 million in excess revenue on taxpayer refunds with any excess going to the pension fund.
If the reserves topped $400 million, the excess would be split with taxpayers and pensions each getting half.
Kenley, whose bill alters the trigger, said he hopes Espich will be up to discussing changing what it takes to initiate the refund.
“We’ll keep the trigger where it is for this first year,” Kenley said, “to kind of follow through with the commitment we made to the taxpayer.”
Jessica Wray is a reporter for TheStatehouseFile.com, a news website powered by Franklin College journalism students.