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State Budget Committee Hears of Possible $1 Billion Deficit

A forecast received Wednesday by the State Budget Committee offers little hope of economic growth in the near term.  The numbers show Indiana and the nation as a whole have begun a recovery, but it’s the slowest post-recession turnaround in decades.  Bloomington State Representative Peggy Welch, who sits on the committee, said the lackluster figures mean the next biennial budget will start in the red.

“We still have about a half- to one-billion dollar structural deficit, which means we still are in the hole approximately a half- to one billion,” Welch said.

The accounting also shows it could take until 2013 for the state to resume collecting the same amount it was pocketing in 2008 – effectively nullifying five years of possible growth.  And Welch says those numbers still don’t get the state back to its pre-recession budget.

“We are projecting into 2010 that we would take in about 13.4 [billion dollars] and in 2013 that we be taking in about 13.9," she said.  "Even though what we’re taking in for revenue -- which means taxes, let’s make that real clear – it’s increasing, it’s still not totally paying for all that we are obligated to pay in the State of Indiana.  And understand that 13.9 [billion] includes 15% cuts across the board for all of our agencies.”

The Indiana General Assembly begins discussion of the next biennial budget in January.

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