The state collected $22 million more in revenue than expected in December.
Despite forecasts showing modest growth each of the next two years, the Republicans who control the state's coffers say they're staying cautious.
The governor-elect's proposal banks on 2.5-percent revenue increases in the next two years and on spending 1.5-percent more in the next state budget.
Kenley has been the state’s leader on pushing for greater collection of online sales taxes.
Indiana could see its Medicaid costs rise by more than $600 million during the next seven years once the Affordable Care Act is implemented.
Indiana's economy appears to be improving, based on the latest jobs report, and that could foreshadow higher state revenues for next year.
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.
Amtrak is asking the state for subsidies even as the Hoosier State Line lost riders during the past year.
After three days of negotiations behind closed doors, House and Senate Republicans released what they hope is the final version of the state budget.
Legislators continue work on the budget as the 2011 session winds down.