INDIANAPOLIS | Schools would get spending hikes of 4 percent, plus additional money for kindergarten and textbooks under the two-year state budget Democrats plan to present this morning.

Gary Community Schools Corp. is the only one of Indiana's 292 school districts that stands to get less general state support under the proposed funding formula, said House Ways and Chairman Bill Crawford, D-Indianapolis.

Democrats sought to provide more general funding for all schools but hemorrhaging enrollment apparently made it impossible to accommodate Gary schools. Crawford said the district should, however, benefit greatly from other state money set aside for full-day kindergarten and textbooks.

Low-income students currently receive free textbooks, but the state reimburses districts for only about 57 percent of the cost.

Crawford said the Democrats' budget spends another $43 million to pick up the full cost. That would mean a sizable boost for Gary, where about two-thirds of students are eligible for free books.

The same goes for full-day kindergarten. The proposed budget includes about $150 million to phase-in the program, starting next year with low-income students in all districts.

That budget gives Republican Gov. Mitch Daniels one of his top priorities -- full-day kindergarten -- and takes away another -- a proposed 30-year Hoosier Lottery lease designed to raise $1 billion or more to attack "brain drain."

Senate Republicans tried Thursday to soften opposition to the lottery plan by requiring that the lease fund at least one college scholarship a year at every state high school. They also suggested steering proceeds above $1 billion to local police and fire pensions, a cause that resonates with House Democrats.

That apparently did little to sway Democratic House Speaker Pat Bauer, who repeatedly has criticized the state university presidents who support the Republican governor's lottery proposal.