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GOP Road Funding Plans Lower State Safety Net

By Wes Martin

Posted January 19, 2016

Road funding plans moving through the legislature would reduce the amount of money the state considers an adequate reserve.

Both proposals by Gov. Mike Pence and House Republicans would lower the percentage the state keeps in reserve. House Speaker Brian Bosma said lawmakers have continued to increase state surpluses since the 90's, as economic downturns have forced them to reconsider the amount they hold in reserve.

"In the recessions of the 90's we moved ourselves up to about nine or 10 percent," Bosma said. "It was clear that was not enough for the recessions of 2007-2008."

Former governor Mitch Daniels effectively capped funding surpluses at 12.5 percent with the automatic tax refund law. But Bosma said legislators have excluded school funding reserves from the surplus calculations, bumping current state reserve levels up to around 13.5 percent.

"I had dozens of people tell me, 'don't send me a check for $30, invest in schools and roads.'"

Gov. Pence had campaigned for a 15-percent safety net, but his Pence's road funding plan and House Republicans' alternative would effectively dial that back to 11.5 percent. Bosma said Pence's 15-percent safety net was too much, while the Great Recession established that 10-percent wasn't enough.

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