How to spend the state's surplus becoming big debate

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INDIANAPOLIS, Ind. -- Determining how to spend the state’s more than $2 billion surplus is looking to be one of the biggest debates of the 2020 session. Republicans want to spend $300 million in cash on higher education projects. These would include a veterinary school at Purdue University, repairs and renovations at Indiana University, and building projects at Ball State, Indiana State, University of Southern Indiana and Ivy Tech. If these projects are paid in cash, it could save the state millions.

“These items are already budgeted, they’re already approved," said Sen. Rodric Bray, the Senate President Pro Tem. "It’s just a matter of how we are going to pay for them and we can do it in a way that’s going to save the state $100 million.”

Now, budget forecasters say we could see an extra quarter-billion dollars on top of the $2.27 billion surplus.

Governor Eric Holcomb is expected to reveal what he wants to do with that money next week.

“Stay, tuned, you’ll hear more from me at the State of the State address,” said Holcomb.

Democrats want surplus money to go toward teacher pay.

“Which do you think is more important? Paying cash down on those types of projects or is it to make sure that our teachers are fairly paid and that they are done so this year?” said Sen. Tim Lanane, Senate Democratic Leader.

Former Republican Senator Brandt Hershman said people should look at the surplus like their own bank account.

“If you get a pay raise, you can spend more over a long period of time," said Hershman. "If you have money in your savings account, you can spend it once.”

Hershman believes using surplus money for long-term issues like teacher pay wouldn’t be a smart solution.

Governor Holcomb appointed a committee to find an on-going teacher compensation fix for the 2021 budget session.

“It’s important to remember what that reserve would be used for in difficult times, it would pay for Medicaid, that’s healthcare for the poor and the elderly, and it would pay for schools,” said Hershman.

A bill that would allow the state to pay for higher education projects in cash goes to the House floor for a third reading on Monday.

Amendments regarding teacher pay increases have been struck down so far, but more are expected as this bill moves forward.

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