Indiana ends 2013 budget with improved cash balance

July 11, 2013

Indiana's budget picture is a little brighter with news the state ended its last fiscal cycle with more money than expected.

Gov. Mike Pence on Thursday praised budget closeout numbers showing the state with $93 million in an ongoing surplus and $86 million more than expected in cash reserves.

"Our discipline when it comes to the state's financial management allows us to meet our budgetary goals as well as positioning our state for a solid financial future. That is something most states today would envy," Pence said.

The majority of the new money will be used to pay off bonds for the Miami Correctional Facility. Pence says the surplus would be best used to pay down debt left to him when he took office and save taxpayers money in the long term. The decision does not affect the state's automatic tax refund, which lawmakers reworked last year to only be triggered in budget-writing years.

Indiana ended its 2013 budget year at the end of last month and began its 2014 budget year on July 1. The budget closeout is an annual report of what the state actually spent versus what was budgeted, which is typically presented by the state auditor.

The improved budget picture comes shortly after lawmakers approved a $30 billion, two-year budget earlier this year with a modest income tax cut sought by Pence and more funding for roads and education.

House Minority Leader Scott Pelath, D-Michigan City, said the new number might sound good, but ignores the pain felt by most residents. He noted the surplus was built on deep cuts to services over the last few years.

"Our unemployment rate still remains around 8 percent," he said. "Families still are struggling to keep their heads above water. Our local schools still must grapple with doing more with less."

Former Gov. Mitch Daniels left office with sizable cash reserves and an ongoing surplus, built on a combination of improved tax collections, deep spending cuts and the 2011 discovery of a large tax error at the Department of Revenue.

Legislative leaders from both parties pushed this year to restore much of the funding for roads and schools that Daniels cut through the end of his term. Pence spent much of his first legislative session pushing instead for a 10 percent cut in the personal income tax.

But the governor shifted somewhat Thursday, saying the improved collections should go toward paying down debt he inherited.

Senate Minority Leader Tim Lanane, D-Anderson, attempted to play on one of Pence's top priorities, improved job training, in making a case that the money could be put to better use.

"By emphasizing prudent investment in job skills training, in a robust, statewide early education program, addressing backlogged local infrastructure projects and finding ways to curb the cost of attending college, we can take those needed first steps," he said.


Recent Articles by Associated Press

Comments powered by Disqus