Indiana spending may depend on COVID-19 aid

The Associated Press

INDIANAPOLIS — Indiana Gov. Eric Holcomb wants to boost school spending and restore some state spending cuts ordered earlier this year but acknowledged Thursday that might not be possible unless Congress approves more COVID-19 assistance for states.

Holcomb announced an unspecified increase in school funding among his priorities for the upcoming 2021 legislative session, a day after a new report projected small increases in state tax collections over the next two years following big drops last spring amid business closures caused by the coronavirus pandemic.

Even though state leaders across the country have been calling for more federal help, congressional Republicans' opposition has blocked a proposed aid package of about $160 billion for state and local governments.

Holcomb, a Republican, said such assistance was “very important” as Indiana faced potentially $40 million to $60 million a month in ongoing costs tied to the COVID-19 pandemic for schools, testing and contact tracing programs over perhaps six more months.

Holcomb said his goals of restoring some $100 million in university fundingthat was cut in June and boosting economic development grant programs could depend on more federal assistance.

“If the federal government doesn’t, then some of these things may not happen. It’s just that blunt,” Holcomb said. “Or we may have to wait longer as our economy continues to grow and pull us out of this.”

Indiana received $2.4 billion from the federal CARES Act approved in March but has yet to spend about $700 million of that money that must be allocated by the end of December.

The Holcomb administration plans to dedicate $400 million to the state’s unemployment insurance trust fund to avoid borrowing money from the federal government to make jobless benefit payments after the fund was drained by a steep jump in unemployment in the spring.

“We believe it is prudent to make a deposit to avoid that borrowing,” said Cristopher Johnston, director of the state’s Office of Management and Budget.

Republican legislative leaders have already backed Holcomb’s priority of protecting full state payments to school districts with a bypass of a law capping per-pupil funding for students who take at least half their classes virtually at 85% of full in-person student funding.

Other initiatives Holcomb discussed Thursday include completing the Interstate 69 extension between Martinsville and Indianapolis, building a proposed I-69 bridge over the Ohio River near Evansville with Kentucky officials, and expanding the South Shore commuter rail line in northwestern Indiana.

The governor also wants to provide more money for expanding broadband internet access and adding to the state’s recreational trail network.

Holcomb renewed his call for a law requiring more businesses to provide workplace accommodations for pregnant women. Legislative Republicans rebuffed that proposal during the last session after complaints from business groups about companies possibly being exposed to lawsuits.

Holcomb said his agenda was aimed at helping Indiana's economy bounce back and “making sure that we are in the best position to accelerate away from this pandemic.”

House Democratic Leader Phil GiaQuinta, of Fort Wayne, said he was disappointed that Holcomb’s proposals didn’t focus on directing more help to those struggling financially from the coronavirus-sparked economic downturn.

“I understand the importance of Indiana’s ability to maintain a stable economy throughout this pandemic, but it would be irresponsible to continue neglecting Hoosiers who have been unable to work due to illness or have lost jobs because they needed to stay home with their children,” GiaQuinta said. “This is not the time to drop the ball when it comes to providing financial security to all Hoosiers.”

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