(Indianapolis, Ind.) - New Indiana Governor Mike Pence has proposed a $29 billion, two year state budget that increases education spending and delivers on a campaign promise.

Indiana Office of Management and Budget Director Chris Atkins presented the governor's spending plan to the State Budget Committee on Tuesday. It was the first public look at Pence’s budget proposal which increases state funding by about 1.4 percent each year, while also strengthening the state’s reserves.

"This is a jobs budget," said Pence in a news release. "It holds the line on spending, funds our priorities, and allows Hoosiers and most small businesses to keep more of their hard-earned income."

Pence’s budget allows room for the 10 percent personal income tax cut he promised during his campaign. The cut, which reduces revenue by $790 million, would be implemented over the course of the next two years. However, Republican leadership in both the House and Senate have raised concerns whether the state can afford the tax cut.

Education gets a slight boost, although not a full restoration of the $300 million cut by former governor Mitch Daniels in 2009. Pence’s budget increases state K-12 education funding by $63 million, or about one percent. Another $64 million in grants is dangled before the highest-performing schools based on the state’s A through F grading scale in 2015. Funding for full-day kindergarten remains intact both years.

Millions more dollars are set aside for higher education and job training. There is a one percent increase for the state’s public colleges and universities. $9 million will be put towards workforce improvement in each of the two years. Another $3 million in each year will go towards creating vocational programs in every high school in the state by creating the Indiana Works Council.

The budget does not include money for Medicaid expansion allowed under the federal Affordable Care Act, but it does increase Medicaid funding by $200 million in 2014 and again in 2015 in order to keep up with normal growth. The legislature will have a larger say in whether Indiana goes along with the Medicaid expansion under Obamacare.

Another $35 million will be poured into the maligned Indiana Department of Child Services to hire more caseworkers. The department’s new funding will be used to expand the emergency hotline.

The budget proposal uses more than $300 million from the state’s reserves for road and transportation projects. Currently, extra money beyond the state’s $2 billion surplus is redistributed to taxpayers and used to maintain pension funds. The amount is forecasted at $347 million over the next two years.

Now that Pence has put forth his spending plan, the state legislature will take up the budget next. The budget must be passed before the legisltative session ends April 29.

LINKS:

Mike Pence Delivers Inauguration Address

118th Ind. General Assembly Begins Monday

Governor-Elect Pence Defends Tax Cut Plan

Pence Proposes Cutting State Income Tax

Pence: Revenues Allow For State Tax Cuts