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Daniels warns of more cuts amid revenue declines

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Indiana Gov. Mitch Daniels warned Thursday morning that more state budget cuts could be coming in light of a prolonged drop in tax collections.

The governor held a press conference at the Statehouse to announce that Indiana collected $2.8 billion in total revenue during the fiscal first quarter, $474 million less than it did during the most recent period.  Further, collections were 8 percent less than what the state had forecast.

Daniels declined to reveal what actions he might take to help stop the bleeding, instead opting to wait until the next state forecast is released in December before deciding how to proceed.

“Nothing’s off the table right now, but let’s not act impulsively,” he said. “It’s very likely we’ll have to take more dramatic steps than we’ve taken right now.”

Those include the possibility of employee layoffs and suspending or postponing certain state programs.

The budget has already cut most agency spending by about 10 percent. The reductions are largely being made by not filling job vacancies, reducing travel and delaying some capital projects.

First-quarter sales taxes, which account for 40 percent of state revenue, were $183 million lower than in the fiscal first quarter of 2008 and $71 million lower what was predicted.

Daniels said the severe impact the recession is having on state finances may prompt officials to update the methods it uses to forecast state revenues.

If revenues remain flat, the state could be in danger of draining its $1.4 billion surplus by 2011. It already has used a quarter of the safety net to help stay afloat.

“We’re not going to turn prisoners out of prison early; we’re not going to close state parks,” Daniels said. “But again, we’re going to do things we’d much rather not do to protect Hoosiers from tax increases.”

The drop in sales tax is connected to the state’s high unemployment rate. Indiana's jobless rate in August fell below double digits for the first time since April. The August seasonally adjusted unemployment rate of 9.9 percent represented a decline of 0.7 percentage points from July. 

But Daniels is wary of the drop, and state officials have acknowledged the decline could just be a blip.

Daniels said he sees no evidence in his travels around the state that the unemployment rate is dropping and “doesn’t trust” the current numbers.
 

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  • Watch my cuz,Mit , is he ready to cave-in ? Dont say i did not warn you.bigd
  • Mr. Daniels lack of faith in the unemployment numbers proves to me that he is still able to think for himself. Of course, we all know that those numbers reflect mainly those Hoosiers who have run out of benefits and are no longer being counted; for a politician to admit something is "off" is very refreshing.

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  1. Why not take some time to do some research before traveling to that Indiana town or city, and find the ones that are no smoking either inside, or have a patio? People like yourself are just being selfish, and unnecessarily trying to take away all indoor venues that smokers can enjoy themselves at. Last time I checked, it is still a free country, and businesses do respond to market pressure and will ban smoking, if there's enough demand by customers for it(i.e. Linebacker Lounge in South Bend, and Rack and Helen's in New Haven, IN, outside of Fort Wayne). Indiana law already unnecessarily forced restaurants with a bar area to be no smoking, so why not support those restaurants that were forced to ban smoking against their will? Also, I'm always surprised at the number of bars that chose to ban smoking on their own, in non-ban parts of Indiana I'll sometimes travel into. Whiting, IN(just southeast of Chicago) has at least a few bars that went no smoking on their own accord, and despite no selfish government ban forcing those bars to make that move against their will! I'd much rather have a balance of both smoking and non-smoking bars, rather than a complete bar smoking ban that'll only force more bars to close their doors. And besides IMO, there are much worser things to worry about, than cigarette smoke inside a bar. If you feel a bar is too smoky, then simply walk out and take your business to a different bar!

  2. As other states are realizing the harm in jailing offenders of marijuana...Indiana steps backwards into the script of Reefer Madness. Well...you guys voted for your Gov...up to you to vote him out. Signed, Citizen of Florida...the next state to have medical marijuana.

  3. It's empowering for this niche community to know that they have an advocate on their side in case things go awry. http://www.youtube.com/watch?v=Lrst9VXVKfE

  4. Apparently the settlement over Angie's List "bundling" charges hasn't stopped the practice! My membership is up for renewal, and I'm on my third email trying to get a "basic" membership rather than the "bundled" version they're trying to charge me for. Frustrating!!

  5. Well....as a vendor to both of these builders I guess I have the right to comment. Davis closed his doors with integrity.He paid me every penny he owed me. Estridge,STILL owes me thousands and thousands of dollars. The last few years of my life have been spent working 2 jobs, paying off the suppliers I used to work on Estridge jobs and just struggling to survive. Shame on you Paul...and shame on you IBJ! Maybe you should have contacted the hundreds of vendors that Paul stiffed. I'm sure your "rises from the ashes" spin on reporting would have contained true stories of real people who have struggled to find work and pay of their debts (something that Paul didn't even attempt to do).

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