Last December, I was on a panel with Democrat state Rep. Greg Porter and Republican Sen. Jim Merritt and made this prediction: The Indiana we see today and the one we find next spring will be very different places.

To some degree, I was right. The jobless rate is about 5 percent higher, standing at 10.6 percent as the Indiana General Assembly concluded its special session Tuesday with a $27.8 billion biennial budget.

The day before, the “new” Chrysler reopened its four plants in Kokomo. General Motors is still in bankruptcy. The Indiana treasurer — Richard Mourdock — is still scheming for ways to shut them down and throw about 50,000 more Hoosiers out of work in one of the kookiest chapters in our long auto history.

But this special legislative session opened up another struggle: public education. What emerged was a cultural war that will be played out in the classroom, the playground, the city.

“I believe that the other side has a position on public education they have not articulated,” said state Rep. Ed DeLaney of Gov. Mitch Daniels and Republicans. “I think there is a direct assault on public education and they won’t say it.”

“Where does this concept go?” DeLaney, D-Indianapolis, asked. “This came in late and it came from one party. We need to have common schools. We must say no to the lingering death of Indianapolis Public Schools. What size should it be? We budgeted less for 2,000 less students.”

“If this is an end to public education as we know it, I say thank goodness. We need to end it as we know it and move on,” Gov. Daniels said Wednesday.

Sen. John Broden, D-South Bend, said, “Looking at the bigger picture, you cannot escape talk of K-12 education. It’s roughly half our budget.”

He said that Indianapolis schools will lose $28 million, even though the state spends $11,000 per student — Gary $13 million, East Chicago will lose $3.5 million and Anderson $4.3 million. He said that many of the schools would face huge additional circuit-breaker losses because of the 1-2-3 property tax caps.

The funding loss comes five years before the 2014 balloon payment is due for No Child Left Behind, which seeks to have every student in the U.S. proficient. In many other districts, the spending is as low as $5,000 per student.

The struggling urban schools will now have vastly less resources to bring their woeful graduation rates up to speed.

“They will go to communities already facing school funding formula losses,” Broden said. “Where is the tipping point? Do we expect these school corporations to compete with charter schools? Compete with neighboring schools?”

State Sen. Lonnie Randolph, of East Chicago, noted that Carmel-Clay would receive $2.9 million more, and Zionsville $2.7 million. East Chicago is facing teacher layoffs and program cuts.

State Sen. Tim Lanane, D-Anderson, sees a city where its schools and City Hall will be running on fumes. Anderson schools will lose $4.7 million in one year and $4.9 million the next.

“When you do look at the impact on the caps, it’s not just on the schools, but cities and towns,” Lanane said. “Muncie had to lay off 40 firefighters.

“I’m very concerned about what we’re doing to our cities and urban areas. We don’t want our cities to survive; we want them to shine. Remember that phrase, ‘The Shining City on the hill?’ I worry that we’re sending the message that we’re giving up on our cities.”

Rep. Porter explained, “The bottom line is this proposed legislation in my eyes is toxic to public education.”

And state Rep. John Bartlett added, “No one has explained to me how we can justify giving $750 million to grown men to play a boy’s game at Lucas Oil Stadium and Conseco Fieldhouse and yet we can’t fund education.”

Republicans eagerly defended the budget. State Sen. Gary Dillon, R-Columbia City, noted that, for instance, Indianapolis Public Schools had been looking at a $1,100-per-student increase. Instead, it was $400. “I don’t know what the right balance is, but we hit it on the middle.”

State Sen. Brandt Hershman, R-Wheatfield, acknowledged, “it’s not equal. Your challenges are not unique and they are not alone.”

And the architect of the budget — Senate Appropriations Chairman Luke Kenley — noted that during budget deliberations, the circuit-breaker was “never brought up.” He said that people were “leaving meetings because they were mad” over how the pie was being sliced.

Senate Minority Leader Vi Simpson said it was necessary to “get beyond this kind of warfare every two years” and urged the General Assembly to take a comprehensive look at how education is funded, adding that it doesn’t necessarily mean the same dollar amount for each student. Kenley agreed.

And then there’s Superintendent of Public Instruction Tony Bennett, who said in Merrillville that 35 states cut education funding, while Indiana will see a 1.1 percent increase next year, even though many urban and rural districts will see cuts. “The money should follow the students,” he said.

Bennett mentioned that the most promising changes in state education are coming in Louisiana, where its system was almost destroyed by Hurricane Katrina in 2005.

So, is that what Indiana should be doing, blowing up public education as we know it? Create a modern system instead of the layers and layers that evolved into what we have now that generates an anemic graduation rate in the low 70th percentile?

That’s a profound question that every Hoosier should ponder over the next six months.

Brian Howey is publisher of Howey Politics Indiana at www.howeypolitics.com