|As the recent discussions over the biennial state budget continued, Indiana’s economic situation seemed to keep becoming bleaker. Each revenue estimate was more pessimistic than the last.
For Indiana University to emerge from this budget process with a small increase in operating funds, partial funding for our new School of Informatics and authorization for some important capital projects is quite good news, given the state’s fiscal condition.
The final budget package fell far short of what we had originally hoped. But we appreciate the efforts of higher education advocates such as Rep. Patrick Bauer, Sen. Vi Simpson and others in the General Assembly, and the leadership provided by Gov. Frank O’Bannon in preventing higher education from losing too much ground.
Plenty of challenges lie ahead. First, we must decide on a budget and tuition plan that will allow us to maintain our quality, and to retain and attract top faculty.
Other challenges are more long-range and extend far beyond the boundaries of our campuses.
Indiana University—indeed every public university in our state—has a vital role to play in helping strengthen and diversify our state’s economy. A more highly educated citizenry working in knowledge-based, high-tech businesses will broaden Indiana’s economic base and help smooth out the ups and downs of the business cycle.
Public education depends on state funding. And this year’s budget shows how tenuous that funding can be. While economic growth has slowed in our state and nation, Indiana’s unemployment rate is still around 3.5 percent, low by historical measures. But even with relatively strong employment, the General Assembly struggled to come up with adequate tax revenues to support basic public services, not to mention make new investments.
That speaks to a larger problem with the state’s tax system. During a legislative session that included reapportionment and budget issues, lawmakers were reluctant to take a larger look at tax restructuring. That issue will gain even more immediacy when the issue of residential property tax reassessment comes before the legislature.
Designing a fair, efficient tax system to provide adequate support for basic state services will require both hard work and compromise. But unless that issue is resolved, drafting a budget for the next biennium will likely be even more difficult. And higher education and the state’s economic future will again be put at risk.
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