Indiana state budget

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Indiana is currently facing a budget shortfall of approximately $1.8 billion for FY 2010.^[1] In the 1st Quarter FY 2010 state revenues drop $254 million, 8%, below forecast as announced by Gov. Mitch Daniels on October 8, 2009. At the time state budget officials projected an estimated FY 2010 budget deficit of $1 billion if revenue continued to fall. "Thank goodness we have built up reserves. And thank goodness we didn't spend them, or lots of them, as some people wanted to do," said Gov. Daniels. The state ended the last fiscal year with $1.3 billion in reserves. About $300 million of those reserves are slated to be used in the current budget.^[2] However, the fall in revenues forced Daniels to make hundreds of millions of dollars in budget cuts, including: $150 million from higher education and $300 million from public schools. In the "2010 State of the State Address" Daniels emphasized the need to "streamline state government."^[3]

Despite the state's looming deficit and failing revenues, Gov. Daniels said, "we will not make this recession worse by adding one cent to the tax burden of our fellow citizens." The General Assembly recently approved a ballot measure for the statewide 2010 ballot, widely supported by Gov. Daniels, which will let voters decide whether to amend limits on property tax bills into the state constitution.^[3]

In early July 2009 the Indiana General Assembly passed a two-year state budget narrowly avoiding a state government shutdown.^[4] The last time that the government had to shut down the government because officials were unable to pass the state budget was during the Civil War.^[5]

[edit] Budget Background

The Indiana General Assembly meets annually and has a biennial budget. The governor submits the budget to the legislature in accordance with IC 4-12-1-9(a): Before the second Monday of January, in the year immediately after preparation, the budget report and the budget bill shall be submitted to the Governor by the budget committee. The Governor shall deliver to the house members of the budget committee such bill or bills for introduction into the House of Representatives.^[6]

[edit] Budget figures

The 2009-2011 state budget passed June 30, 2009 by the Indiana General Assembly during the 2009 regular and special sessions provides:^[7]

Total Funds

• $26.2 billion FY 2009 (listed as a comparison)
• $26.9 billion FY 2010
• $26.9 billion FY 2011

General Funds

• $14.4 billion FY 2009 (listed as a comparison)
• $13.6 billion FY 2010
• $14.1 billion FY 2011

The following table provides a history of Indiana's expenditures and gross domestic product (GDP).

• NOTE: The figures for FY 2009 won't be finalized until the end of the fiscal year.

See Indiana state budget (2008-2009) for more details.

[edit] 2009-2010 budget crisis

See also: State budget crisis, 2009-2010

Indiana is currently facing a budget shortfall of approximately $1.8 billion for FY 2010.^[1] The fall in revenues has forced Daniels to make hundreds of millions of dollars in budget cuts, including: $150 million from higher education and $300 million from public schools. In the "2010 State of the State Address" Daniels emphasized the need to "streamline state government."^[3][9]

Despite the state's looming deficit and failing revenues, Gov. Daniels said, "we will not make this recession worse by adding one cent to the tax burden of our fellow citizens." The General Assembly recently approved a ballot measure for the statewide 2010 ballot, widely supported by Gov. Daniels, which will let voters decide whether to amend limits on property tax bills into the state constitution.^[3]

Among the budget cuts announced by the governor in order to reduce the state's looming budget deficit were slaugherhouse inspections, however, on February 1 the governor reversed his decision. The planned cut included cutting the inspection budget by less than 50%.^[10][11]

[edit] 2008-2009 budget crisis

See also: Indiana state budget (2008-2009)

Indiana faced a decline in state revenue that resulted in a $763 million deficit for fiscal years 2009 to 2011. The state budget committee projected that Indiana would spend $13.305 billion while taking in $12.542 billion in revenue.^[12] At the time, Gov. Mitch Daniels said, “We will adjust our spending to preserve a balanced budget in the state of Indiana. These are only the first and hardly the last of the hard decisions that need to be made.”^[13]

Despite the state's increasing unemployment and the urging of lawmakers to use the state's surplus, $1.2 billion, Gov. Daniel's said that the surplus must be preserved at all costs in case the recession drags on and that money is needed even more down the line. "Until someone can show us persuasively how long this is going to last and how deep this recession is going to get, we're simply not going to do that," he said.^[14] The Governor has already called for pay freezes in 2009, a 3 percent cut of the executive agency budget, which already had been cut by 7 percent for FY 2009 and a ban on out-of-state agency travel.^[12]

Indiana ended fiscal year 2009 in the black with the aid of federal stimulus funds and after Gov. Daniels cut $530 million from the 2009 budget passed in 2007.^[15] Gov. Daniels described the final budget bill a "compromise that has its defects" but added that he is pleased that the bill includes limited spending.^[16]

In early July 2009 the Indiana General Assembly passed a two-year state budget narrowly avoiding a state government shutdown.^[4] The last time that the government had to shut down the government because officials were unable to pass the state budget was during the Civil War.^[5]

[edit] Accounting Principles

Indiana does not have a state controller, rather fiscal duties are split among the Office of Management & Budget (OMB), State Auditor and State Treasurer.^[17]

Ryan Kitchell has been Indiana’s OMB Director since 2007.^[18] The Legislature, at the Governor's request, created a new organization within state government called the Office of Management and Budget ("OMB"). The OMB brings together the financial and auditing functions of Indiana. The Director of the OMB is the state's CFO.^[19]

Tim Berry has been Indiana State Auditor since 2007. The Indiana State Auditor is responsible for:^[20]

• Accounting for all of the State's funds
• Overseeing and disburse county, city, town, and school tax distributions
• Paying the State's bills
• Paying the State's employees
• Administrating Indiana’s Deferred Compensation Plan.

The Institute for Truth in Accounting (IFTA) rates Indiana “Tardy” in filing the state’s Comprehensive Annual Financial Report (CAFR) – The annual report of state and local governmental entities. IFTA rated 22 states timely, 22 states tardy, and 6 states as worst. IFTA does not consider Indiana’s CAFRs, and those of the other states, to be accurate representations of the state’s financial condition because the Generally Accepted Accounting Principles (GAAP) basis does not include significant liabilities for the pension plans and for other post employment benefits, such as health care.^[21] Indiana’s CAFRs are published online by the Indiana State Auditor.^[22]

[edit] Accounting transparency checklist

Comprehensive Balanced budget Timeliness Usability

[edit] The good

• The website has Comprehensive Annual Financial Reports (CAFR) dating back to 1999.^[23]
• An independent auditor’s report is published on page 3 of the document. ^[24]
• It provides supplements to the budget workup, such as non-major Governmental funds, starting on page 121 of the document.
• The budget is posted using organized and consistent methods of financial reporting.
• Indiana law requires a balanced budget, but it allows a deficit.^[25]
• It includes all costs incurred by the government, including future liabilities, starting on page 92 of the document.
• The CAFR compares estimated and actual budgetary numbers, such as on page 112 of the document.
• The Indiana office was timely in submitting the budget.

[edit] The bad

• The CAFR is posted in PDF format, so it’s not searchable online.

Richard Mourdock has been Indiana State Treasurer since 2007. The treasurer of state is responsible for the safekeeping and investment of moneys and securities paid into the state treasury. (Indiana Code 4-8.1-2-1)^[26]

"These ratings reaffirm that Indiana is in far better fiscal shape than many other states because we continue to carefully manage our spending and maintain a reserve," said Ryan Kitchell, director of the Office of Management and Budget.^[28]

[edit] Budget transparency

Indiana currently has no statewide, official spending database online. Although Indiana House Bill 1280 would have placed spending information online, the bill died during the 2009 regular session.^[29]

[edit] Website evaluation

Budget Usability Elected Officials Administrative Officials Ethics Audits Contracts Lobbying Public records Taxes

In.gov is the website for the state of Indiana.

• Main article: Evaluation of state websites

[edit] The good

• Site has a search function and is easy to navigate.
• Budget is published.^[30]
• Elected officials are listed with contact information.^[31]
• Ethics commission information is provided.^[32]
• State tax information is posted.^[33]
• Audit reports are published.^[34]
• Information on and form for requesting public records is available.^[35]
• All active state contracts are available.^[36]
• Administrative officials are listed with contact information in a searchable directory.^[37]
• Provides searchable database of registered lobbyists.^[38]

[edit] The bad

• Does not provide information on state-paid lobbying and agency lobbying contracts.

[edit] Economic Stimulus Transparency

• The American Recovery and Reinvestment Plan of 2009 designated $787 billion to be spent throughout the U.S. Of that $787 billion stimulus package, it is estimated that 69%, or over $541 billion, will be administered by state governments.^[39]

• It is estimated that Indiana will receive at least $3 billion in federal funding.^[40]

• The economic recovery website for Indiana is available here.

[edit] Error in ARRP

On November 16 and 17, 2009, many errors were found in the $747 billion plan that showed the plan set aside money for districts that do not exist. According to Recovery.gov, the plan shows its funds will go to 884 Congressional Districts, though there are only 435.^[41][42]

Indiana gained five fictitious Congressional Districts through the ARRP website. The 18th District, for example, was given $2.2 million. Indiana’s population would have to double, in order to have 18 districts.^[43]

[edit] Government tools

Indiana has a database of contracts, available from the Indiana Department of Administration. The State's Active Contracts listing provides an up-to-date list of all professional services contracts in which the state is currently a party.

The following table is helpful in evaluating the level of transparency provided by Indiana Active Contracts:

Criteria for evaluating spending databases

State Database	Searchability	Grants	Contracts	Line Item Expenditures	Dept/Agency Budgets	Public Employee Salary
Indiana Active Contracts

[edit] Limitations and Suggestions

[edit] Support for creation of the database

Governor Mitch Daniels created the contracts website with an Executive Order in 2005.

[edit] Public employee salary information

Thanks to www.indystar.com, citizens have a public employee salary database available to them, found at this link.

Salaries of Purdue University employees are updated annually at High Ed Salaries.

The Better Government Association offers this database of selected public payrolls. The BGA database includes employee salaries for the Indiana Inspector General, the Indiana State Police, and the states of Indiana, Illinois, and Missouri.

[edit] See Also

• Indiana taxpayer-funded lobbying

[edit] External links

• Model transparency legislation from the American Legislative Exchange Council is available at this link.
• Indiana Policy Review Foundation
• Indiana State Budget Agency
• Indiana Government spending

[edit] Additional reading

[edit] References

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	v • d • e State of Indiana Indianapolis (capital)
Transparency	Access to Public Records Act | Transparency Checklist | Government corruption reports | Transparency Legislation | Open Records procedures | Transparency Advocates | State budget | Taxpayer-funded lobbying associations |
Divisions	State | List of Counties | List of Cities | List of Towns | List of School Districts | Evaluation of county websites | Evaluation of city websites | Evaluation of township websites | Evaluation of school district websites |
Government	Indiana State Constitution | Executive | House of Representatives | Senate |
Judiciary	Indiana Supreme Court | Judicial Nominating Commission | Circuit Court of Appeals | District Courts | Judicial Nominating Commission | Judicial news | Judicial activist organizations |
Ballot Measures	Ballot measures | Ballot access court challenges | Procedures for qualifying an initiative | Amending the constitution | History of direct democracy | Campaign finance requirements |