BREAKING NEWS: Gov. Daniels announces more actions to reduce state spending

Friday, November 6, 2009

INDIANAPOLIS -- Gov. Mitch Daniels today initiated state agency spending reductions following the fourth straight month of lower than forecast state revenues for Fiscal Year 2010.

For October, revenue collections were again below the May 2009 forecast. Total tax collections were $46 million below the forecast amount for the month. For the first four months of the fiscal year, general fund revenues are $309 million or 7.4 percent below forecast.

"We have seen enough to know that new actions are necessary if we are going to protect Indiana taxpayers against the tax increases that are happening in most of the rest of America," said Daniels. "Indiana has distinguished itself among the states, avoided tax increases, maintained all vital services, because we have been willing to act on time, to deal with our difficulties."

Reductions ordered by the governor today are expected to save the state about $300 million to $400 million over the biennium.

Budget actions taken today

*	State agencies will reduce spending by at least 10 percent from the as-passed budget. The governor had already ordered a 5 percent spending reduction in July.
*	The lieutenant governor, auditor, treasurer, secretary of state, and superintendent of public instruction have committed to 10 percent spending reductions in their own office budgets.
*	Reimbursements to some Medicaid providers will be reduced.
*	State employees will not receive a pay increase in 2010, the same action as 2009. The last time there were back-to-back years with no pay raises was in 2002 and 2003.
*	Gov. Daniels will not accept his full pay in 2010, the same action he took for 2009 when his salary was due to increase from $95,000 to $107,882.
*	State agencies will offer voluntary unpaid leave for the remainder of the current fiscal year.
*	State agency capital projects will be deferred. This includes new buildings or structures, infrastructure and system upgrades, and site improvements.
*	Some dedicated funds will be transferred to the general fund. Amounts will vary and will not disrupt the long-term viability of the program supported by the dedicated funds.

The state ended Fiscal Year 2009 with $1.3 billion in reserves. If the current revenue trend continues and the governor had not ordered spending cuts, state budget agency officials estimate the state's reserves would be depleted by August 2010.

"We agreed to dip into reserves $300 million over two years, and now it's gone in four months. If we keep dipping, it will all be gone next August," said Daniels.

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I'm glad to see that Governor Daniels has decided to cut State government spending. At a time when the Federal government is increasing spending in response to decreased tax revenues, it is refreshing to see the State of Indiana moving in the right direction in this regard.

-- Posted by For Liberty on Fri, Nov 6, 2009, at 12:14 PM

I agree that it is nice that he is cutting spending but not giving State employees a raise is not right. The cost of living continues to rise for everyone including them!

-- Posted by rwkem on Fri, Nov 6, 2009, at 12:47 PM

It's not just state employees that aren't getting a raise, I know alot of people that aren't getting a cost of living raise this year, me included. We pretty much got told be lucky you have a job.

-- Posted by bloommom on Fri, Nov 6, 2009, at 1:32 PM

They say the cost of living is not raising, therefore those on social security will not be receiving a raise this year.

-- Posted by Sue62 on Fri, Nov 6, 2009, at 2:17 PM

Starting Jan 2010 there will be an increase in

Medicare, no raise for Cost of Living and prices on everything steadily rising. It will be a good

time to cut back on non-essentials. Examples,

cable, cell phones, eating out......and the list

goes on. Most everyone can live on less and we should be content with what we have....

-- Posted by Carnac on Fri, Nov 6, 2009, at 10:52 PM

I think it is a very small gesture that Mitch Daniels is not taking his full salary this year. He should try to get by on the minimum wage and see how easy it is to get by on less than $20,000 a year. For that matter, all of them should have to try to get by on less than $20,000 a year. The members of the state legislature have a set salary plus they get perdiem pay for any time they go to Indy and they get their meals paid for by you and me. They also are reimbursed for mileage. The "special" session last summer cost the citizens of Indiana $80,000. Mitch Daniels called the special session...HE should have to pay for it out of his own pocket. These arrogant people, who have absolutely NO IDEA what life is like for middle or low income families or for families with no one working through no fault of their own, absolutely make me sick. Poor Mitch will have to struggle to get by on $97,000 this year. Kinda makes you want to take up a collection for the man, doesn't it???

-- Posted by virginiagrace on Sat, Nov 7, 2009, at 10:53 PM

Maybe Daniels should stop giving state grants to fix covered bridges and use the 41 route for the I-69 and he could save millions just on those two items...

-- Posted by former t-bird fan on Mon, Nov 9, 2009, at 9:37 AM