INDIANAPOLIS — With almost no time to spare before their midnight deadline, Indiana lawmakers adopted a new two-year, $28 billion state budget Friday night and closed out this year's legislative session. Both chambers of the General Assembly approved the budget on party lines, as hefty Republican majorities provided plenty of room to breathe.

The Senate's 37-13 vote came 93 minutes before the midnight deadline, and the House's 59-39 vote happened with 36 minutes left.

Its passage was a feather in the cap of Gov. Mitch Daniels, who has achieved most of the agenda he set forth for his final "long" four-month legislative session in office.

The Republican had already shepherded through the legislative process a series of education reforms, including a private school voucher program, a charter school expansion and a new teacher evaluation system.

The budget includes the last remaining pieces of his education agenda: A pot of $6 million for 2012 and $9 million for 2013 for teacher merit pay, and what has been dubbed a $4,000 "Mitch Daniels scholarship" that those who graduate from high schoolers a year early can apply to college tuition.

The budget adds $47 million to the state's full-day kindergarten funding, making grants to help pay for the program available to every school in the state, if those schools choose to offer it.

"We put our money behind our reforms, with almost all new money going to education," said Sen. Luke Kenley, the Noblesville Republican who is a key budget architect.

It also includes a version of the automatic taxpayer refund that Daniels wanted.

If Indiana's surplus tax collections exceed $1.4 billion, or 10 percent of what the state spends in a year, the extra cash would be split 50-50 between the state's pension stabilization fund and refunds for taxpayers.

Also wrapped into the budget was a parting shot at Democrats who halted progress when they left Feb. 22 to spend five weeks in a Comfort Suites hotel in Urbana, Ill., in hopes of derailing several education and labor initiatives they disliked.

In the future, House and Senate leaders could sue minority party members who bolt as the Democrats did to prevent the establishment of a two-thirds quorum required by the Indiana Constitution in order to business.

The penalty would be $1,000 per day, plus court and attorneys' fees. That would put back on the books a law that existed for about a century, but was repealed in 1976 for reasons lawmakers this year say they do not know.

Sen. Lindel Hume, D-Princeton, said he opposed the budget because of major changes it would make to the formula by which Indiana's $6.3 billion in annual K-12 education funding is divided.

Those funding formula changes would eliminate mechanisms that traditionally have favored urban and rural schools where enrollment is declining and have sent fewer dollars per pupil to growing, often suburban, schools.

"We've got a lot of problems in this bill," Hume said.

Sen. Vaneta Becker, R-Evansville, praised the budget's architects Kenley and House Ways and Means Committee Chairman Jeff Espich, R-Uniondale for some late changes.

The two agreed to keep in place current funding levels for a program called "CHOICE," which pays for care to keep aging Hoosiers in their home and out of nursing homes. For that, Becker offered thanks.

She also lauded their decision to include language that allows for changes, but prevents the closure, of the Evansville Psychiatric Children's Center.

"Sometimes it comes down to whether you want to move forward or stay where you're at," she said. "I guess we need to move forward."

The vote capped a day of last-minute negotiations on a long list of unresolved bills.

Also clearing their final legislative hurdles Friday was a measure to let police ticket motorists who send texts and emails while driving, as well as one that would allow guns in most public buildings.

Lawmakers hammered out a compromise version of an illegal immigration crackdown, as well. Instead of the Arizona-style law that Republican Sen. Mike Delph of Carmel originally sought, the final version prods businesses to check the legal status of those they hire.

They sent to Daniels' desk a bill that would allow Indiana's governor, for the next 10 years, to sign public-private partnerships with companies to build new toll roads.

Now, all political-watchers' eyes will turn to Daniels, the Republican governor who has said he would announce whether he is running for president after the session's end.

Daniels has scheduled a press conference Saturday morning alongside Republican House and Senate leaders to sign into law a part of his education reform agenda that would launch a merit pay program for teachers.

However, he is not expected to make his plans known at that event. He said Thursday that an announcement will not come over the weekend.

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