STATEHOUSE - When Gov. Mitch Daniels recently announced an 8 percent drop in state revenue collections, Indiana was far from unique. Similar news has made headlines in many states across the country.
What separates Indiana from the rest of the pack is how the news is being handled. Indiana remains one of the few states not raising taxes or cutting vital services. Gov. Daniels has emphasized neither will happen to solve problems created by the current shortfall.
Even with the bad news, it was a day to reflect on past decisions with the words - as the governor put it - "thank goodness."
"Thank goodness" Indiana has been one of the few states to have balanced budgets and built-up reserve funds and lawmakers resisted the urge by some to spend those reserves, the governor said.
Many other states would probably like to trade financial positions with Indiana.
The New York Times recently reported tax collections among states have dropped a record 16.6 percent from April through June when compared to the same period a year ago. The report - done by the Nelson A. Rockefeller Institute of Government - found total state tax collections were down $63 billion nationwide for the fiscal year that ended in June. The Times pointed out the $63 billion shortfall is "roughly twice the amount of money the states had received in fiscal relief through the stimulus program up to that point."
Hoosiers are more fortunate that residents of other states. According to the Rockefeller Institute, at least 20 states have raised taxes by a combined $26.5 billion so far to fill revenue gaps.
Some tough decisions may be ahead as Indiana continues to weather the storm. But they hopefully won't reach the level of anguish that other states have already experienced. The National Conference of State Legislatures reports these developments in budget battles across the country:
- In Arizona, 1,000 state employees have been laid off;
- In California, 17,500 teachers have been laid off, with another 5,000 corrections and human services workers possibly to follow;
- In Illinois, the governor has ordered elimination of 2,600 state jobs, including 1,000 prison workers, 870 human service workers and more than 300 state police employees;
- In Michigan, 300 state employees may be laid off - including 100 state police officers; and
- In Missouri, the governor has proposed cutting 1,329 state jobs.
Here in Indiana, we've established hiring and wage freezes in state government, but there haven't been any layoffs yet and we're still paying our bills. We have money in our savings account and we have a balanced budget. Just as you routinely do in your household budgeting, our state government may have to further trim its expenses. Because education represents half of the state budget, some additional funding previously budgeted may have to be reviewed, but hopefully not slashed, as has been the case in other states.
Legislative frugality has prepared us for these rainy days. What do you think?
Please contact me at State Senator Dennis Kruse, Indiana Senate, 200 W. Washington Street, Indianapolis, IN 46204 or call 1-800-382-9467, or send e-mail to senator.kruse@in.gov
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