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Indiana Faced $900 Million Budget Shortfall, Still Ended Fiscal Year With $1.4 Billion Reserve

By Brandon Smith

Posted July 16, 2020

Office of Management and Budget Director Cris Johnston

Office of Management and Budget Director Cris Johnston said the future still looks cloudy. And he said Indiana will need “more austere budgets” as a result. (Zoom screenshot)

Indiana faced a $900 million hole in its finances in the fiscal year that ended last month.

The state is covering its shortfall through cuts to state agencies, federal help and its budget reserves - with $1.4 billion still left in state coffers.

Budget officials estimate Indiana took a hit of nearly $600 million in the last fiscal year from the impact of the COVID-19 pandemic. That was seen, for instance, in sales tax and gaming revenues that fell far short of expectations. Yet a big chunk of the budget shortfall can be traced to Tax Day getting moved from April to July, which means the state should still collect a lot of that money.

That’s good news for the new fiscal year that just started July 1. But Office of Management and Budget Director Cris Johnston said the future still looks cloudy. And he said Indiana will need “more austere budgets” as a result.

“To not only meet and deliver sound services to our citizens but then the ultimate outcome is to restore the reserves,” Johnston said.

READ MORE: Indiana Expects Budget Shortfall Of More Than $3 Billion By Next Year

Officials said state agencies were able to save money by leaving vacant positions unfilled and renegotiating contracts – not by cutting services.

Contact reporter Brandon at bsmith@ipbs.org or follow him on Twitter at @brandonjsmith5.

For the latest news and resources about COVID-19, bookmark our Coronavirus In Indiana page here.

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