Photo: Jimmy Emerson (Flickr)
A recent study from the national organization State Budget Solutions shows Indiana has the third lowest public debt per-capita in the U.S. Indiana has a per-capita debt of $5,700, less than half the national average for state per-capita debt.
State Budget Solutions President Bob Williams says many states incurred large amounts of debt over the recession, while Indiana tightened its belt.
“We use Indiana as a model at State Budget Solutions for what states should do,” he says. “Indiana has done better than most states at addressing a lot of their costs, putting through health savings accounts, education reform.”
Indiana Fiscal Policy Institute President John Ketzenberger says that puts Indiana in a good position moving forward. He also says part of the reason Indiana is in such good fiscal shape is that the state had reserve funds that helped it through the economic downturn.
“Indiana was fortunate that it had built a reserve before the recession,” he says. “It used that reserve. It also got several billion dollars from the federal government as a part of the RecoveryAact and used those funds well, and it made some difficult choices.”
Not everyone agrees with those choices. Assistant House Minority Leader Scott Pelath says Indiana has had a surplus in recent years, and that money could have gone to programs that faced cuts.
“We do know, for instance, that they gutted $300 million out of public education that’s caused school layoff all across the state, and then only a few months later strangely we found over $300 million that was missing in the state’s coffers,” Pelath says. “So that’s not something to brag about, that’s really something they should feel shamed into.”
Governor Mitch Daniels announced Thursday the state would spend $360 million of its budget surplus shoring up public employee pension funds. Another $360 million is being returned to taxpayers through the automatic taxpayer refund next spring.