Governor seeks to raise taxes to aid education

By Heather Mangold
City Editor

In an effort to increase funding for education in Indiana, Gov. Frank O'Bannon presented the General Assembly, on Tuesday, with a new budget plan that would raise taxes.

"We've made great strides in education over the past four years and we simply cannot afford to take one step backward," O'Bannon told lawmakers on Tuesday. "I am proposing a budget that will allow us to deal with declining revenues while meeting our most important obligations."

The new plan proposed by the governor would mean two things for Hoosiers. The first is that a 50-cent per pack tax increase would be places on cigarettes sold in Indiana. The second would suspend the personal property tax credit that was passed in 1999. The credit would give Hoosiers an estimated $265 million for the next two fiscal years, said O'Bannon. Other means to provide more funding for Hoosiers would include the transfer of gaming revenues.

Not all lawmakers are pleased with the way the governor has chosen to support education. Sen. Ron Alting, R-22nd, said that Indiana's small businesses and agriculture would suffer.

"They will pay for the majority of this," said Alting.

When O'Bannon released his first version of the state's budget in January, education received no increase in funding because Indiana's income was not rising. Nothing has changed and this budget proposal is not the answer to Hoosier's fiscal problems, said Alting.

Last week, fiscal numbers suggested that Indiana would receive $923 million less than was previously projected in December.

O'Bannon did not disagree that Indiana is facing tough times.

"Our choice, while difficult, is very clear," said O'Bannon. "Either we move backwards halting the progress we have made, or we make the tough choices that will allow Indiana to move forward."

The new budget plan proposed by O'Bannon would provide a 4 percent increase each year for operating appropriations in higher education. Terry Strueh, vice president of state relations at Purdue, said that Purdue officials are supportive of O'Bannon's recent budget proposal.

"We certainly appreciate the governor coming forward with a proposal that does support higher education," said Strueh.

Actual figures that would determine how the governor's proposal would directly affect Purdue have not yet been released.

Governor seeks to raise taxes to aid education

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City editor:
Heather Mangold

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