Governor Mike Pence made a case for a 10 percent income tax cut, even as some GOP leaders have said the state should spend more of its surplus.
The governor will likely advocate for the budget he outlined last week, including a 10 percent tax cut.
Some school corporations may be caught in a financial limbo by discussions at the Statehouse.
A budget proposed by Gov. Mike Pence gives higher education institutions a one percent funding increase, with funding based on performance the following year.
The city of Kokomo has $10 million in reserves and a structural surplus in its yearly budget.
Only two of Indiana's Republican Congress members have not signed a pledge to never raise taxes.
The governor-elect says Espich's expertise in finance legislation and the state budget will benefit the adminstration.
Indiana could see its Medicaid costs rise by more than $600 million during the next seven years once the Affordable Care Act is implemented.
Universities have been petitioning the state this week for additional funding, but they are not the only ones seeking part of Indiana's $2 billion surplus.
Indiana public universities went before two states committees Thursday to make their requests for additional funding next year.