(Indianapolis, Ind.) - Mitch Daniels delivered his budget wishes to Indiana lawmakers Thursday.

Indiana Statehouse

The governor’s proposal will reduce spending on higher education, but won’t slash any further the amount the state provides for public K-12 education.

Slightly over $13.7 billion dollars will be spent for the 2011 Fiscal Year with an increase to $13.98 billion for 2012.

State budget director Adam Horst told lawmakers the governor’s spending plan will result in a $725 million surplus after two years while not raising taxes.

“We’ve made a lot of tough decisions. If we can continue to hold the line we’ll come out in a very competitive position; a position that will be envied by a lot of other states,” Horst said. 

The proposal cuts higher education spending by nine percent from the last budget passed in 2009. Optional Medicaid services such as dental care, hearing aids, and chiropractic help will end.

State workers will also experience a freeze in their salaries.

The 2009 budget included a total of $450 million in cuts, a good chunk of that in K-12 education. Those funds won’t be restored.

Statehouse lawmakers have until April to send a budget to the governor’s desk, otherwise they risk a special session which was required during 2009’s negotiations.