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State colleges face $150M in cuts as tax revenues fall

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Indiana Gov. Mitch Daniels said the state will cut $150 million in funding for state colleges and universities because of a continuing decline in tax revenues.

Daniels also said Friday morning during a press conference that other steps will be taken because revenues are missing their targets significantly.

Tax collections for November were $144 million below forecast, and for the first five months of the fiscal year are $475 million below target. Daniels said if previously announced budget cuts and the new steps were not made, what was a $1.3 billion surplus in July would be wiped out by next summer.

Daniels said universities will work with the Commission for Higher Education in deciding how the $150 million in cuts will be made. A new revenue forecast will be presented on Dec. 15.

Indiana University President Michael A. McRobbie pledged to work with state officials on the cuts, but expressed concern that they be fairly allocated among the state's public institutions.

"It is ... essential that these new proposed cuts not fall disproportionately on institutions that have already made sacrifices that others were exempt from making," he said in a written release.

Other budget-cutting actions announced on Friday included:

— Suspending a $15 bi-weekly matching contribution to state employees for deferred compensation retirement accounts for calendar year 2010. Savings are estimated at $9 million.

— Directing the Department of Administration to further reduce the number of state-owned vehicles. Since 2005, the number of state-owned vehicles has been reduced by over 2,500, according to the governor's office.

Additionally, the governor will submit a package of cost-savings initiatives to the Indiana General Assembly.  It will include a proposal to combine the administration of the Public Employees Retirement Fund and the Teachers’ Retirement Fund, which is projected to reduce investment management fees and administrative duplication by at least $50 million per year. The proposal also will include merging or eliminating several boards and commissions.

House Republican Leader Brian C. Bosma, R-Indianapolis, applauded the cost-saving steps.

“Every level of government, including our universities, are having to cut back," Bosma said in a release. "While none of these decisions are easy, I think with all of us working together we can weather this fiscal storm. But the No. 1 priority must continue to be protecting the taxpayer, and I support the governor’s steps in this regard.”

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  • IFA
    The Indiana Finance Authority let several folks go today.
  • Thanks, Brian
    â??Every level of government, including our universities, are having to cut back," Bosma said in a release.

    Agree, and look forward to the cuts that the legislature will make in its own operations.
  • Moneys There
    If the governor and INDOT would give up on the wasteful I-69 project, they could free up the $700M they had pigeon holed. The project is a total waste of the few tax dollars we have and could be put to much better use fixing the roads and bridges we have.

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  1. The deductible is entirely paid by the POWER account. No one ever has to contribute more than $25/month into the POWER account and it is often less. The only cost not paid out of the POWER account is the ER copay ($8-25) for non-emergent use of the ER. And under HIP 2.0, if a member calls the toll-free, 24 hour nurse line, and the nurse tells them to go to the ER, the copay is waived. It's also waived if the member is admitted to the hospital. Honestly, although it is certainly not "free" - I think Indiana has created a decent plan for the currently uninsured. Also consider that if a member obtains preventive care, she can lower her monthly contribution for the next year. Non-profits may pay up to 75% of the contribution on behalf of the member, and the member's employer may pay up to 50% of the contribution.

  2. I wonder if the governor could multi-task and talk to CMS about helping Indiana get our state based exchange going so Hoosiers don't lose subsidy if the court decision holds. One option I've seen is for states to contract with healthcare.gov. Or maybe Indiana isn't really interested in healthcare insurance coverage for Hoosiers.

  3. So, how much did either of YOU contribute? HGH Thank you Mr. Ozdemir for your investments in this city and your contribution to the arts.

  4. So heres brilliant planning for you...build a $30 M sports complex with tax dollars, yet send all the hotel tax revenue to Carmel and Fishers. Westfield will unlikely never see a payback but the hotel "centers" of Carmel and Fishers will get rich. Lousy strategy Andy Cook!

  5. AlanB, this is how it works...A corporate welfare queen makes a tiny contribution to the arts and gets tons of positive media from outlets like the IBJ. In turn, they are more easily to get their 10s of millions of dollars of corporate welfare (ironically from the same people who are against welfare for humans).

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