The House budget adds $200 million for education and $500 million for roads to the proposal submitted by Gov. Mike Pence last month. Pence also wanted a 10 percent cut to the personal income tax, which would have cost $500 million a year, but lawmakers left that out of the House bill.
Although outnumbered 69-31, Democrats argued that the budget still doesn't spend enough on education and continues to shift more burdens on the middle and lower class.
"Looks at this budget, it's not a good budget, it's not a sound budget, it's not a budget for all," said Rep. Greg Porter, D-Indianapolis, the top Democrat on the budget-writing House Ways and Means Committee.
But the lead budget writer in the House countered that the budget restores much of the funding that was cut during the last few years.
"The recession, the Great Recession, we have lived through something in our lifetime I hope we never go through again. Taxpayers didn't have it in their pockets to give to schools, it just wasn't there," said the committee's chairman, Rep. Tim Brown of Crawfordsville.
The Republican noted that the $6.7 billion the budget spends on education is the most allocated in the state's history. The budget covers fiscal years 2014 and 2015.
Republican leaders have said they are not ruling out the tax proposal that Pence made the centerpiece of his run for governor last year and his top legislative priority in his first year in office.
Pence has said he is disappointed by the decision to leave the tax cut out of the budget but is optimistic he can win his signature proposal before lawmakers wrap up work April 29.
Leaders in both chambers have held some cards tight in the ongoing budget negotiations, saying updated tax collection forecasts due in April will give them a better idea about what the state could afford over the next two years.
Budget writers are working with a roughly $500 million budget surplus each year and roughly $2 billion in cash reserves left by former Gov. Mitch Daniels. But they are also facing pressure from many, including local and county leaders who slashed budgets during Daniels' tenure, to restore spending cut during the recession.