Governor Mike Pence says he’s working on the spending plan he’ll present to legislators in five months, and he is insisting on a reserve of one-eighth the total state spending as a firewall against recession. That’s the maximum surplus allowed by state law.
Pence directed state agencies to trim their budgeted amounts by three-percent, and state universities by two-percent, to keep that reserve on track.
“We stated that when I applied for this job, that would only fund the state government for about a month and a half,” Pence said. “And it exists as a backstop against downturn so we won’t have to burden taxpayers, in the event that we see another season like we saw in the great recession.”
Pence says that reserve target won’t change, and that it’s one of Indiana’s key selling points in attracting businesses and jobs to the state.
Indiana fell half-a-percent short of expected revenues last month, the first month of the new fiscal year.
State Democratic Chairman John Zody argues that the state is paying for its rainy day fund with a “subpar quality of life.”
Democratic legislators and a few Republicans have also questioned the practice of withholding money that legislators budgeted.