STRAIGHT FROM THE SENATE

SENATE LEADING BY EXAMPLE, SENDS NEARLY 14 PERCENT OF BUDGET BACK TO GENERAL FUND

Indiana’s Senate is leading by example during tough budgetary times by sending back nearly 14 percent of its fiscal year 2010 budget to the state general fund. The Senate is the first to announce the results of its own cost-cutting measures. The money was reverted back to state coffers on June 30, the end of the 2010 fiscal year.

Total Senate budget savings were $1.9 million, or 13.9 percent of its overall fiscal year 2010 budget. These savings are in addition to the 4.8 percent that was trimmed by Senate leaders during the course of the budget-writing process last year. The Senate has achieved cost savings by finding operating efficiencies, eliminating non-essential expenditures, going without pay raises for two consecutive years and suspending new hiring for all but essential personnel.

Some may question whether these spending figures were actual reductions in costs to taxpayers or simply lower increases in annual spending. The answer is spending reductions from allocated amounts were achieved under each of the two previous budget years, as well as in 2010. Leading by example, the Senate spent significantly less in real dollars in fiscal year 2010 than it did in either FY2009 or FY2008.

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The Indiana Senate understands that government is not recession proof. Hoosier families, businesses and farms have had to do some serious belt-tightening during this economic downturn, and we must do the same. By being responsible with the taxpayers’ money now, Indiana will be positioned to emerge from this recession stronger and in a better situation than many other states.”

When the 2010 fiscal year ended last Wednesday, state tax revenues were about $1 billion short of budgeted amounts, due to the ongoing effects of the global recession. The significant revenue shortfalls led Gov. Mitch Daniels to reduce state agency budgets by at least 10 percent from their fiscal year 2010 budgeted amount in order to improve the state’s bottom line.

Gov. Daniels has called on the legislature, the courts and other elected officials to find savings of their own. The Senate exceeded this 10 percent goal by voluntarily cutting 4.8 percent during the budget process and reverting an additional 13.9 percent through cost savings.

Reducing spending will help lawmakers avoid an economy-killing tax increase during already tough times.

According to The National Conference of State Legislatures, 24 states raised taxes in 2009 to cope with shortfalls caused by the lingering recession. Bert Waisanen, a fiscal analyst at the NCSL, said state revenues typically lag about two years behind the national recovery from a recession – so even more states could be forced to raise taxes in the new fiscal year.

Indiana senators believe the best thing government can do to help pull us out of this recession is to create an environment where private enterprise can flourish. One of the best ways to do that is to keep the tax burden low. Controlling state spending and finding efficiencies wherever we can will help sustain a good business climate in Indiana.

senator.long@iga.in.gov