Despite tax revenues that struggled for much of the fiscal year, Indiana closes its book with a surplus of more than $100 million and reserves topping $2 billion.
Going into the final month of the fiscal year, Indiana was about $50 million short of expectations, but a strong June helped the state end the year about $13 million above projected levels.
Still, Indiana brought in nearly $60 million less this year than last year.
Office of Management and Budget Director Chris Atkins says a $100 million surplus was built into the budget, and it’s important for the state to hit that mark.
“The closer you get to zero, you don’t leave yourselves any flexibility if the situation gets any worse than that and then you do have to start cutting into your reserves in order to balance your budget,” Atkins says. “So that’s why we want to maintain that cushion.”
Achieving that surplus level was accomplished by cutting the budgets of state agencies and universities.
Indiana’s higher ed institutions reverted $33 million back to the General Fund, more than $27 million more than they were asked to last year.
Indianapolis Representative Greg Porter, the ranking Democrat on the Ways and Means committee, says it is disgraceful to be proud or delighted with the surplus and reserve numbers announced Monday.
“It does prove that we know how to hoard money in the bank,” Porter said in a statement. “What it doesn’t prove is that we know how to run state government in a way that benefits the people of Indiana. It is a fool’s errand to simply look at a bottom line of around $2 billion without understanding how they got to that number and what is being lost by their devotion to a big number at the expense of all else.”
He adds that Republican “bloodlust” to cut taxes contributed to declining revenues and will continue to hurt the state in the future.
Senate Minority Leader Tim Lanane agrees, saying those reserves were earned by hoarding tax dollars instead of spending them, for instance, on in-home elder care, providing subsidies to parents who adopt special needs children, or fully funding pre-kindergarten education.
Yet State Auditor Suzanne Crouch says the state increased funding for K-12 education, the Department of Child Services and transportation infrastructure. She notes it’s important for the state to maintain a strong reserve.
“Not only to taxpayers, in terms of emergencies or economic downturn, but it also sends a very strong message to our credit rating agencies that we’re prepared to address emergencies,” she says.
Crouch says a recent Standard and Poor’s report lists Indiana as one of only six states prepared to weather the next recession.