I am getting mixed messages out of Indianapolis with respect to the state’s budget outlook. Last week, there was happy news from the Governor about a budget surplus and a $110 per taxpayer refund. Today, Tom LoBianco, writing for the Associated Press, has an article entitled Capitol Crossroads: Grim budget picture shapes up for Indiana lawmakers.
Last week, because the state’s budget surplus exceeded 10% of its budget, taxpayers get a hundred bucks. This week, Speaker Bosma is quoted as saying “the fiscal fog is thick,” because state tax collections are stagnant and because gambling revenues are falling as adjacent states get into the gambling game, because of cuts to corporate income taxes, because of a phase out of the state inheritance tax, and because of Gov-elect Pence’s call for a 10% cut in personal income taxes.
As a result:
Even though lawmakers and governor-elect Mike Pence come into 2013 with a state flush with cash reserves worth an estimated $2 billion, they’re facing programs starved for support — including the Department of Child Services, which told lawmakers it has trouble holding caseworkers because of low salaries — and a continued economic drag.
When you get down to it, lawmakers who want to reduce government services probably ought to be more forthright and replace the explanation of “we can’t afford it” with the more accurate explanation of “we don’t want to.”
you forgot to put “budget surplus” in quotes.
Either that, or the forecasts for the revenues need to be a whole lot more honest. Rosy or grim, depending on proximity to election day and April 15th.
So the lawmakers will look at the budget problems and decide to vote instead on issues where they have some real expertise, social issues. This ride will be interesting.
How does the money owed to whatever pension fund it is not count when the surplus is calculated?
Well, when you cut a predictable revenue stream (property taxes) and are left with very fickle ones (sales, income) then you get budget weirdness.
Doesn’t help with the usual budget shenanigans that politicians have started doing lately.
Also, doesn’t Indiana owe the feds like $2billion for unemployment insurance or something like that?
I would rather my part of the surplus go back into schools and roads.
The State owes a potload of money to the Teacher Retirement Fund that it has stolen over the years. Do you count stolen money in a surplus?
Stuart. According to the chief beancounter, his Mitchiness, it is
whatever sounds good to enhance his regime, but while
simultaneously ignoring the truth.
I should have considered that. Truth is in the eye of the accountant.
I dunno, I think it’s great that Mike Pence is already seeing resistance from all parties to his idea to further cut taxes. I am intrigued to see how he will handle the messy art of being involved in government.
It continues to amaze me that with the idea that the state can not be in debt yet it can defer payments and yet if I defer payments its called debt. The billions owed the retirement funds and other “deferred” such as what is owed to the federal are prime examples.
Jack, it’s that endearingly Hoosier trait of kicking a problem down the road and making it the future’s problem. It’s endemic in Johnson County.
I’m shocked, shocked to find that the man who engineered a major accounting gimmick for the federal government in 2001 — changing the due dates and anticipated payment dates for Social Security and corporate taxes — to send taxpayers a check would do the same thing in Indiana.
Sorry, I was channeling Captain Renault for a moment there.