(STATEHOUSE) Feb. 15, 2005 -House Bill 1001, the biennium budget for the State of Indiana, authored by Ways and Means Chairman Jeff Espich (R-Uniondale), will balance the state's books for the first time in ten years and does not contain a tax increase. The proposed budget will get rid of Indiana's current structural deficit of $526.6 million by the end of fiscal year 2007 without any borrowing, bookkeeping maneuvers, or the use of other dedicated funds, as has occurred in previous years.

"We faced a challenge in coming up with a plan to balance our state's economy," stated Chairman Espich. "I am very optimistic with our proposed budget and its plan to pull us out of our deficit without raising taxes."

The budget includes an estimated $650 million in new spending, $181 million of which will increase education funding throughout the state. The bill will also reform the school funding formula, making tuition dollars follow the student. Under the current formula, some schools are guaranteed an increase in funding even if their enrollment declines. With the new formula, no such misallocations of tax dollars will be allowed. To address the concerns of schools that benefit most under the past funding guarantees, the new formula contains provisions designed to give greater preference to schools that teach a large number of disadvantaged students.

The proposed budget will also require state colleges and universities to create guaranteed tuition programs that will give students the opportunity to avoid yearly tuition increases. Students can do this by selecting a fixed-rate

option to lock in a tuition rate throughout their college career. The bill will also direct state colleges and universities to create over 70 courses in 12 degree areas that are guaranteed to be transferable between state institutions.

"It is vitally important for our state institutions to guarantee transferable credits to college students," stated Chairman Espich. "A college student who cannot transfer college credits from one state institution to the next is literally throwing their money away."