Indiana has a new budget; but not everyone is happy with it.

It came down to the wire. With just a few hours to go, lawmakers avoided a government shutdown Tuesday night and finally passed a new 2-year budget totaling $27.8 billion.

The Democrat-controlled House passed the bill by a vote of 62-37. The Republican-controlled Senate voted 34-16.

In a statement, Gov. Mitch Daniels says the budget still has defects, but protects people from tax increases.

With federal stimulus money added in, the budget leaves a billion dollars in the state's reserve fund. Democrats wanted to use more from the surplus to boost education funding, and those who voted against the budget had sharp words for their fellow lawmakers. They said Democrats gave up the fight for education and gave in to the governor.

"I’m embarrassed to be a Democrat,” said Craig Fry (D) Mishawaka in the House chamber Tuesday night. “I'm disappointed. I'm embarrassed and I can't even begin to tell you what this bill is going to do to our state.”

He was embarrassed by what he called a budget that isn't fair to all students. Two of his districts — Penn-Harris-Madison and Mishawaka, for example — will see more money over the next two years, but not as much as students in South Bend.

Expected increase in funding next year:
South Bend: $4.3 million
PHM: $301,000
Mishawaka: $5,000

“And let me tell you something about South Bend Community Schools, is they fail at everything,” Fry said Tuesday night. “Their school board is a disaster. It's an embarrassment and it goes right down the line and my school corporations don't get treated fairly. They have never been treated fairly and I guess they never will be treated fairly because I'm not somebody important in the legislative process. "

On the phone Wednesday, House Speaker B. Patrick Bauer, who represents South Bend and its school district, told WSBT the following:

“I just think there’s a lot of frustration out of people being tired,” he said. “It's been a grueling six months."

Bauer admitted this is not the budget Democrats had hoped for; but he said under the governor's original budget proposal, schools like Mishawaka and PHM would've lost money.

To gain Democrat support, Republicans agreed to increase public school funding in the budget by $54 million in exchange for a deal to keep a billion dollars in the state's reserve fund.

So what does it mean for schools like PHM?

“We should have a few more dollars than we would've had for 2009,” said Denise Seger of PHM Schools.

But not enough, she says, to cover increasing expenses.

“You see utility increases, you see health insurance increases,” she explained. “Our employees, because they maintain another year of service, we will have increment increases.”

Among the school districts that stand to lose funding over the next two years are Middlebury, Baugo, and Fairfield schools in Elkhart County.

But there is some hope. Also in this budget is something called a “trigger mechanism.” As the economy rebounds and more revenue comes in, 50 percent would go directly into the state's education general fund and then be divided among school corporations across Indiana.