INDIANAPOLIS | The Republican-led Indiana Senate voted 32-18 along party lines Tuesday to approve a two-year, $28.1 billion state budget that would allocate another $2 billion in federal stimulus money.

Gov. Mitch Daniels criticized the spending plan last week, saying it's about $600 million too large. An updated state revenue forecast due out Friday will dictate how much the House and Senate must trim.

"Unfortunately, all the indications are that even though we tried to reduce spending by $1 billion extra beyond the (December) forecast, it seems like the (new) revenue forecast will come out even lower than that," said Sen Luke Kenley, R-Noblesville, the Senate's chief budget negotiator.

The Senate plan injects $823 million in one-time federal money to send school districts an average budget boost of 1.9 percent next year and $2.1 million in 2011.

Districts with declining enrollment would get increases in per-student funding but would see overall state support decline by as much as 7 percent in Gary. The budget plan is headed to a House-Senate conference committee for final negotiation ahead of the General Assembly's April 29 adjournment deadline.

"I look forward to coming up with a school funding formula that benefits all of the school children in Indiana," said Sen. Earline Rogers, D-Gary.

The budget proposal also would provide $9 million to complete Little Calumet River flood protection levees.

Sen. Frank Mrvan, D-Hammond, fought for the at least $13.5 million believed to be needed to finish the project. But Kenley said he had a hard time just coming up with the $9 million.