STRAIGHT FROM THE SENATE
STATE SENATE DOING ITS PART TO CUT GOVERNMENT SPENDING
STATEHOUSE – Senate Republicans support spending cuts and wage freezes announced recently by Gov. Mitch Daniels and have prepared for similar cuts in anticipation of continuing state revenue declines.
For October, state revenue was again below the May 2009 forecast. Total tax collections were $46 million below the forecast for the month. During the first quarter of the fiscal year which started in July, general fund revenues were $309 million or 7.4 percent below forecasted figures.
Daniels initiated state agency spending cuts following the fourth consecutive month of lower-than-forecast state revenues.
Similar budget action will be taken immediately by state senators:
•The Senate will reduce overall spending by an additional 5 percent, adding to cuts already made in this year’s Senate budget;
•The Senate will freeze all but essential hiring in 2010;
•Senators will forego pay increases in 2010;
•Senate employees will again forego across-the-board pay increases in 2010; and
•Senate technology upgrades will be deferred.
Lawmakers recognize the need to take such action, “so funding for schools and public safety can be protected as much as possible.”
Even with revenues falling short, many other states would probably like to trade financial positions with Indiana.
The New York Times recently reported tax collections among states have dropped a record 16.6 percent from April through June when compared to the same period a year ago. The report – done by the Nelson A. Rockefeller Institute of Government – found total state tax collections were down $63 billion nationwide for the fiscal year that ended in June. The Times pointed out the $63 billion shortfall is “roughly twice the amount of money the states had received in fiscal relief through the stimulus program up to that point.”
Indiana has been one of the few states to have balanced budgets and built-up reserve funds and lawmakers resisted the urge by some to spend those reserves. Because of those decisions, Hoosiers are more fortunate that residents of other states. According to the Rockefeller Institute, at least 20 states have raised taxes by a combined $26.5 billion so far to fill revenue gaps.
The National Conference of State Legislatures reports these developments in budget battles across the country:
•In Arizona, 1,000 state employees have been laid off;
•In California, 17,500 teachers have been laid off, with another 5,000 corrections and human services workers possibly to follow;
•In Illinois, the governor has ordered elimination of 2,600 state jobs, including 1,000 prison workers, 870 human service workers and more than 300 state police employees;
•In Michigan, 300 state employees may be laid off – including 100 state police officers; and
•In Missouri, the governor has proposed cutting 1,329 state jobs.
Because of the excellent financial stewardship of Gov. Daniels, together with the strong support of the Senate Republican majority, Indiana has been able to avoid such draconian measures.
Sen. David Long (R-Fort Wayne) is President Pro Tem of the Indiana Senate. He serves District 16, which includes portions of Fort Wayne.
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