The governor's proposed 10 percent cut is greater than the savings offered by Senate Republicans Thursday.
The sequester is forcing many air traffic control towers across the state to close. Coats says to end the sequester, President Obama must lead.
Indiana legislators debated the state's budget and whether to restrict purchase of cold medications used for methamphetamine.
Ranking minority leaders say they agree with most of the Republican budget but would still like some changes to be made.
The Senate Appropriations Committee got its first official look at the budget bill Thursday.
At the Statehouse, the House passed a budget and a bill overhauling the state's criminal code. The Senate passed legislation regulating drug-induced abortions.
A White House report outlines specific cuts that would likely be made in Indiana, but state agencies are still trying to determine how they will be implemented.
Senator Joe Donnelly (D-Indiana) says he wants more flexibility in where cuts must happen, while Governor Mike Pence says the state is planning where to cut.
The budget contains increased K-12 education funding, permanent infrastructure funding, and pays down some of the state’s debt.
If Congress does not reach a budget deal by March 1, several programs in Indiana could be cut, the White House warns.