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Indiana budget chief orders another 5 percent in cuts

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State agencies — including those that run prisons, protect children and maintain highways — must cut their spending by another 5 percent during the fiscal year that begins July 1 after already chopping 10 percent a few months ago.

Gov. Mitch Daniels' budget director, Christopher Ruhl, sent a memo to all state agencies Wednesday directing them to hold back 2011 fiscal year spending by 15 percent from the amount approved by lawmakers last year.

It will mark the third time in less than a year that they've had to tighten their belts because state tax collections and other revenues have repeatedly fallen short of projections. Daniels last November ordered most agencies to cut 2010 spending by 10 percent, then said schools and colleges had to pare a combined $450 million.

"For most agencies, this reduction is on top of reductions contained in the budget adopted by the General Assembly for the current biennium last June," Ruhl said in the memo, obtained Thursday by The Associated Press.

The memo's contents were first reported by television station WRTV late Wednesday.

Ruhl's directive applies only to executive branch agencies, but Ruhl has asked other elected officials, the courts and the Legislature to also cut their spending. Early indications were that most would try to comply.

"We will continue to look for efficiencies and ways to save," Lauren Auld, a spokeswoman for Superintendent of Public Instruction Tony Bennett, said in an e-mail message.

"I'm certain we will do what is needed," Scott Minier, a spokesman for state Senate Republicans, said in a statement.

There was no immediate reaction Thursday from Democratic House Speaker Patrick Bauer of South Bend.

Outside state government, one advocate suggested targeted budget cuts that spare essential services could work better than across-the-board reductions. The Indiana Association of United Ways has encouraged local affiliates facing their own revenue shortfalls "to think strategically about their priorities," said Lucinda Nord, the group's vice president for public policy.

Ruhl said that through March 31, or the first nine months of the current state fiscal year, state revenues have come in $867 million below projections, a 9.4 percent shortfall that comes on the heels of a 7.4 percent gap a year ago.

The most recent state revenue forecast shows 2011 fiscal year collections coming in lower than they were as far back as 2006, before the national economic downturn, Ruhl said. If spending levels remained constant without a state tax increase, the state would deplete its current reserves within 14 months and begin the 2012 fiscal year with a deficit.

Austerity moves by various agencies already have included layoffs, pay freezes, cuts in services and postponed building projects. For example, highway crews have shuttered rest stops, some medical providers have received lower Medicaid payments for treating poor patients, and child welfare officials have trimmed a counseling program aimed at preventing abuse and neglect.

Agency spokesmen reached Thursday indicated the spending cuts will continue. Doug Garrison, a Department of Correction spokesman, said the agency was "in the process of examining all facets of our budget."

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  • I will wear Depends
    Thanks for the information about the rest stops being closed. I previous years when I have traveled through Indiana on my way to visit my relatives in Ohio I have stayed at South Bend and visited other places. This year with the rest stops closed I will wear Depends and go through Indiana as fast as I legally can.
  • Not So Quick and Easy
    Cutting the Governor and Legislators pay by 30% would save a few hundred thousand dollars. The governor makes $95,000 and hasn't accepted raises when provided. This is an $800 million problem that needs job creation and economic growth to provide the state with the revenues it needs to not have to keep cutting costs.
  • Quick and easy fix
    The governor and the legislature both need to cut their saleries by 30% immediately. Then this issue will be resolved almost as quick. As long as it is kids in schools, the elderly, the sick, kids in need of services etc. that are effected, this issue will never be resolved. The GOP both in Washington and in Indiana created the mess that caused this, but their wages have not been touched like everyone elses.

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  1. Cramer agrees...says don't buy it and sell it if you own it! Their "pay to play" cost is this issue. As long as they charge customers, they never will attain the critical mass needed to be a successful on company...Jim Cramer quote.

  2. My responses to some of the comments would include the following: 1. Our offer which included the forgiveness of debt (this is an immediate forgiveness and is not "spread over many years")represents debt that due to a reduction of interest rates in the economy arguably represents consideration together with the cash component of our offer that exceeds the $2.1 million apparently offered by another party. 2. The previous $2.1 million cash offer that was turned down by the CRC would have netted the CRC substantially less than $2.1 million. As a result even in hindsight the CRC was wise in turning down that offer. 3. With regard to "concerned Carmelite's" discussion of the previous financing Pedcor gave up $16.5 million in City debt in addition to the conveyance of the garage (appraised at $13 million)in exchange for the $22.5 million cash and debt obligations. The local media never discussed the $16.5 million in debt that we gave up which would show that we gave $29.5 million in value for the $23.5 million. 4.Pedcor would have been much happier if Brian was still operating his Deli and only made this offer as we believe that we can redevelop the building into something that will be better for the City and City Center where both Pedcor the citizens of Carmel have a large investment. Bruce Cordingley, President, Pedcor

  3. I've been looking for news on Corner Bakery, too, but there doesn't seem to be any info out there. I prefer them over Panera and Paradise so can't wait to see where they'll be!

  4. WGN actually is two channels: 1. WGN Chicago, seen only in Chicago (and parts of Canada) - this station is one of the flagship CW affiliates. 2. WGN America - a nationwide cable channel that doesn't carry any CW programming, and doesn't have local affiliates. (In addition, as WGN is owned by Tribune, just like WTTV, WTTK, and WXIN, I can't imagine they would do anything to help WISH.) In Indianapolis, CW programming is already seen on WTTV 4 and WTTK 29, and when CBS takes over those stations' main channels, the CW will move to a sub channel, such as 4.2 or 4.3 and 29.2 or 29.3. TBS is only a cable channel these days and does not affiliate with local stations. WISH could move the MyNetwork affiliation from WNDY 23 to WISH 8, but I am beginning to think they may prefer to put together their own lineup of syndicated programming instead. While much of it would be "reruns" from broadcast or cable, that's pretty much what the MyNetwork does these days anyway. So since WISH has the choice, they may want to customize their lineup by choosing programs that they feel will garner better ratings in this market.

  5. The Pedcor debt is from the CRC paying ~$23M for the Pedcor's parking garage at City Center that is apprased at $13M. Why did we pay over the top money for a private businesses parking? What did we get out of it? Pedcor got free parking for their apartment and business tenants. Pedcor now gets another building for free that taxpayers have ~$3M tied up in. This is NOT a win win for taxpayers. It is just a win for Pedcor who contributes heavily to the Friends of Jim Brainard. The campaign reports are on the Hamilton County website. http://www2.hamiltoncounty.in.gov/publicdocs/Campaign%20Finance%20Images/defaultfiles.asp?ARG1=Campaign Finance Images&ARG2=/Brainard, Jim

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