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Pence: Austerity steps needed despite big reserves

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The administration of Gov. Mike Pence has told state agencies to hold back 4.5 percent of their funding for the current fiscal year despite the state's $2 billion in reserves, a spokeswoman said Thursday.

The State Budget Agency has told agencies not to spend that portion of their appropriations for the 2015 fiscal year, matching austerity measures from last year, Pence Communications Director Christy Denault said in an email to The Associated Press.

Public universities have been told to keep in reserve 2 percent of their operating and general fund line-item appropriations after they had to cut nearly $34 million last year.

"There was a 5 (percent) increase in total funding for higher education in (the last budget year), so even with a reversion, overall budgets were increased," Denault said.

The Republican administration uses the spending cuts to manage potential budget shortfalls and ensure the state maintains adequate reserves, she said.

"Our current reserves of $2 billion are sufficient to run the state for 49 days, and are a significant factor in the state's AAA credit rating, which encourages businesses to bring their jobs to Indiana," she said.

The spending cuts were first reported by the Evansville Courier & Press.

The cuts have been criticized by Democrats, advocates for publicly funded programs and K-12 schools, among others. Adoptive parents have sued the Department of Child Services, claiming it has shorted them on payments while the agency was returning about $240 million to state coffers.

Mark Rozewski, vice president for administration and finance at the University of Southern Indiana, said the Evansville school would have used the money it's being told not spend to add staff and increase capacity for its nursing program, which has had to turn away students.

"Obviously, if these cuts continue into the following years there will be additional negative effects and frankly it puts pressure on tuition," Rozewski told the Courier & Press.

State Auditor Suzanne Crouch reported Monday that the state closed out the fiscal year ending June 30 spending $106 million less than the revenue it took in, allowing the reserves to grow past $2 billion.
 

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  • Pence austerity
    Governments, at all levels, are monopolies. The private marketplace allows competition to drive costs down. In government, it requires strong leadership to do that. I commend Governor Pence for continuing to tell state agencies to find efficiencies where possible and don't just spend money because it is appropriated!!! Sounds like prudent management to me!
  • These jobs...
    Let's see...The Kokomo transmission plant, The Greensburg Honda plant, Subaru expansion that now produces Toyota cars, just to name a few. And maybe the recently announced GE aircraft plant that will create hundreds of jobs?? This is solid investment in Indiana thanks to good governing.
  • State Relies on Fed for Hundreds of Millions
    To Bobby Gene. The legislature appropriates funds. The Governor is expected to spend the funds. Very simple! The state quietly accepts hundreds of millions of dollars in federal funds--highway funds, block grants, community development grants, Medicaid, etc--but the anti-federal government Republicans, particularly the Governor, don't like to talk about this. I'm too worried about the federal government's fiscal position since the US economy is still the biggest in the world and the US government is overall very effective despite all the criticism it gets.
  • Thanks Gov
    So when the next crash comes along,likely in about a year, will YOU thank the governor for his fiscal responsibility? I doubt it. More likely you will blame him for it. Hang onto your hat for the upcoming economic morass that is coming thanks tou YOUR federal government. By design I believe.
  • TEA PARTY MOVE
    Nothing that Pence does is for the benefit of Indiana but for his national tea party regressive leanings.
  • Pence was a mistake
    See comment title.
  • All about 2016
    Remember Gov Bayh did the same thing. Pence wants to be able to campaign in 2016 on how much he cut government spending. I am resigned that I live in a state that refuses to educate its children, maintain its roads, or stop gun violence. Come to think of it maybe I do live in North Mississippi after all.
  • What jobs?
    She said ""Our current reserves of $2 billion are sufficient to run the state for 49 days, and are a significant factor in the state's AAA credit rating, which encourages businesses to bring their jobs to Indiana," she said." WHAT JOBS!!!? I thought daylight savings, getting rid of unions, and lower taxes would bring more jobs? And all these foreign trips by current and previous governor and Indy's mayor? Smoke and mirrors and fuzzy math!!! Also anyone that works in state or local govt knows the money that they ask you to hold back NEVER comes back to your dept or agency. EVER!!!
    • Battlespace Preparation
      The governor has the ability to not spend appropriated funds to manage in the face of revenue fluctuations, but this is clearly Pence re-writing the budget to be more to his liking. Play this one out a bit. Pence uses his executive power to slice the budget. Then he comes along afterwards and shoots for tax cuts to rebaseline revenue to the new spending level. This is battlespace preparation for his next round of tax cut proposals. He's pre-cutting the spending to match his future tax cut proposal. Smart politics as he can then claim that a future cut won't affect services.
    • Misplaced priority?
      Maybe the state wouldn't have to cut spending so much if they would put a little more effort into ensuring that businesses don't steal the sales tax money that consumers have entrusted to them. http://wishtv.com/2014/02/25/state-shuts-down-business-after-i-team-8-investigation/
    • laughing
      Indiana, Texas & North Dakota leading the way?? In what?? Obesity? Low wages? Illiteracy? Smokers? Pollution? Discrimination?
    • Ummm
      The state constitution requires the budget to be balanced. The state is not for-profit and should not be sitting on vast reserves that have been appropriated. What. A. Joke. Pence is an idiot plain and simple. And Texas? A national role model? Seriously?
    • Cutting Rather Than Prioritizing
      The legislature appropriated the funds with the expectation that they would be spent. I think it is clear to most Hoosiers that the state has unmet funding needs--roads, schools, etc. The governor would be expected to move some funds to deal with changing priorities but to arbitrarily decide not to spend appropriated funds seems rather "king like." Isn't this what the US House Republicans call "unconstitutional?" "Regarding the meager tax cut that some of the commenters referred to--has anyone seen the positive impact of these cuts?
    • Tax Cuts
      The government, state and federal, have too much of our money. Tax cuts should be a top priority regardless of circumstance. By the way, regarding infrastructure, if the government did not support, entrepreneurs would solve. How did we survive the old days when there was not central planning?
    • If you dont want your tax cut then write a check to the state
      Hey Hoosier liberal if you dont like the tax cut then by all means write a check to the State of Indiana. They will gladly take it and im sure put the money to good use. Or is that asking to much? Also IBJ please delete the impersonating comments its getting extremely old and its Illegal.
    • Sitting on a hoard of cash is not leadership
      Yes, being fiscally prudent is important. So is making appropriate investments in critical areas to ensure the state is competitive in the future. I'm not sure this move honors the need for the latter.
    • LEADERSHIP
      Now this is what you call LEADERSHIP...something all the whiny democrats and liberals know nothing about! Well-run states like Indiana, Texas & North Dakota are leading the way, while nanny-states like California, Illinois & New York are FAILING.
      • Dumb...
        How about repealing that pointless tax cut?

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