Gov. Eric Holcomb's proposal would spend $702 million out of budget reserves this year to pay down debt on capital projects, highway construction and a teacher retirement fund.

Gov. Eric Holcomb's new state budget proposal would spend $1.13 billion over the next two years on one-time initiatives. And almost none of that would be direct relief for Hoosiers struggling during the ongoing COVID-19 pandemic.

This year, university presidents made sure to emphasize the cost-cutting measures they've taken since the pandemic began.

The new forecast projects Indiana will have about $360 million in increased revenue over the next two-year state budget, compared to the current budget. That would be a boost of barely one percent.

State budget officials project Indiana will have a $1 billion hole in its budget by the end of the current fiscal year, even with the state's significant financial reserves.

The state is covering its shortfall through cuts to state agencies, federal help and its budget reserves -- with $1.4 billion still left in state coffers.

Indiana will not cut funding for K-12 schools, according to Gov. Eric Holcomb. At a news conference Wednesday, he said the state's budget for K-12 schools approved by lawmakers in 2019 will remain on track, despite revenue shortfalls spurred by the COVID-19 pandemic.

Higher education institutions have been asked to take a 7 percent cut in response to the COVID-19 pandemic.

State agencies are being asked to review operations, space, travel and hiring to cut their budgets by 15 percent.

State tax collections were about $960 million, or 44 percent, less than expected for April, and Gov. Eric Holcomb said the state could see a drop of more than $3 billion in tax revenue over the next 14 months.