Indiana state budget
From Sunshine Review
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Indiana saw 1st Quarter FY 2010 state revenues drop $254 million, 8%, below forecast as announced by Gov. Mitch Daniels on October 8, 2009. State budget officials estimate the FY 2010 budget could have a $1 billion deficit by the end of the fiscal year on June 30, 2010 if the trend continues. "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.[1]
In early July 2009 the Indiana General Assembly passed a two-year state budget narrowly avoiding a state government shutdown.[2] 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.[3]
The 2009-2011 state budget passed June 30, 2009 by the Indiana General Assembly during the 2009 regular and special sessions provides:[4]
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
[edit] Budget Background
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.[5] 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.”[6]
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.[7] 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.[5]
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.[8] 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.[9]
The Indiana General Assembly meets annually and has a biennial budget. 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.[10]
[edit] Budget figures
The following table provides a history of Indiana's expenditures and gross domestic product (GDP).
| Fiscal Year | Expenditures (billions) | GDP (billions) |
|---|---|---|
| 2000 | $31.2 [11] | $194.4 [11] |
| 2001 | $33.8 [11] | $195.2 [11] |
| 2002 | $36.3 [11] | $205.0 [11] |
| 2003 | $37.8 [11] | $215.4 [11] |
| 2004 | $39.3 [11] | $228.3 [11] |
| 2005 | $42.0 [11] | $232.8 [11] |
| 2006 | $44.0 [11] | $238.7 [11] |
| 2007 | $46.1 [11] | $246.4 [11] |
| 2008 | $48.2 [11] | $254.4 [11] |
| 2009 | $50.5* [11] | $262.7* [11] |
- 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] 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.[12]
Ryan Kitchell has been Indiana’s OMB Director since 2007.[13] 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.[14]
Tim Berry has been Indiana State Auditor since 2007. The Indiana State Auditor is responsible for:[15]
- 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.[16] Indiana’s CAFRs are published online by the Indiana State Auditor.[17]
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)[18]
| Credit Rating | Fitch | Moody's | S&P |
| Indiana[19] | AA | Aa3 | AA+ |
"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.[20]
[edit] Economic Stimulus Package
Indiana is expected to receive between $4 and $6 billion from the $787 billion economic stimulus package. [21] [22] All told, the federal stimulus plan would create or save 75,000 jobs in Indiana, based on White House estimates.[23] However, in February 2009, Gov. Daniels said that he isn't sure that he will take the stimulus funds because he said accepting federal dollars could cost their states in the long run. Currently the federal plan says the state must expand the unemployment program to part-time and low income workers. But when those federal dollars run out, the state will have to pick up the tab. [24]
On March 3,2009 the state launched a website to provide information about the federal stimulus package and use of the funds in Indiana. [25] [26]
According to preliminary reports Indiana is expected to receive:[27]
- $1.4 billion for Medicaid
- $1.3 billion towards education
- $650 million for roads and bridges
- $400 million for nutrition
- $100 million toward weatherization
- $100 million toward water quality
- $100 million for housing
- $80 million for public transit
- $70 million for energy
- $70 million for employment services
- $40 million for child care
[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.[28]
[edit] Economic Stimulus Transparency
- The Economic Recovery and Reinvestment Act 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.[29]
- It is estimated that Indiana will receive at least $3 billion in federal funding.[30]
- The economic recovery website for Indiana is available here.
[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:
| 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
- Governor Mitch Daniels,"2009 State of the state address," January 13,2009
- South Bend Tribune,"State budget passes, is signed," June 30, 2009
[edit] References
- ↑ Gov. Daniels Press Release, “First quarter revenues miss forecast by $254 million,” October 8, 2009
- ↑ Chicago Tribune, INDIANA: State shutdown averted, July 1, 2009
- ↑ The Los Angeles Times, "States brace for shutdowns," June 30, 2009
- ↑ Indiana State Budget Agency, “2009 - 2011 As-Passed Budget,” August 31, 2009
- ↑ 5.0 5.1 Business First: "Hoosiers join in budget slashing," Dec 11, 2008
- ↑ JournalGazette.net,"Daniels cuts state spending," Dec 12, 2008
- ↑ The Indy Channel,"Lawmakers squabble over how to reverse state jobless rate," March 9,2009
- ↑ Courier-Journal,"Indiana finishes year in the black," July 17, 2009
- ↑ WSBT,"Not all local lawmakers happy with Indiana's new state budget," July 3, 2009
- ↑ National Association of Budget Officers, "Budget Processes in the States," 2008
- ↑ 11.00 11.01 11.02 11.03 11.04 11.05 11.06 11.07 11.08 11.09 11.10 11.11 11.12 11.13 11.14 11.15 11.16 11.17 11.18 11.19 US Government Spending,"Indiana State and Local spending," retrieved March 10,2009
- ↑ Indiana Speaker of the House B. Patrick Bauer, “News from the Statehouse,” February 26, 2009
- ↑ Indiana Finance Authority, “Indiana Finance Authority Members,” retrieved October 21, 2009
- ↑ Indiana OMB Web site, retrieved October 21, 2009
- ↑ Indiana State Auditor Web site, retrieved October 21, 2009
- ↑ Institute for Truth in Accounting, “The Truth About Balanced Budgets—A Fifty State Study,” Page 35
- ↑ Indiana State Auditor Web site, retrieved October 21, 2009
- ↑ Indiana State Treasurer Web site, retrieved October 21, 2009
- ↑ Indiana Finance Authority, “Rating agencies reaffirm Indiana's strong bond credit ratings,” June 24, 2009
- ↑ Indiana Finance Authority, “Rating agencies reaffirm Indiana's strong bond credit ratings,” June 24, 2009
- ↑ Associated Press,"Indiana's Stimulus Take: $4 Billion," February 13,2009
- ↑ Indy Star,"Indiana will get $6B in stimulus funds," February 13,2009
- ↑ American Recovery and Reinvestment Act,"Estimated job effect," retrieved March 10,2009
- ↑ WSJV,"Gov. Daniels may not take stimulus money, laid off workers want it now," February 26,2009
- ↑ State of Indiana,"State launches federal stimulus website," March 3,2009
- ↑ Associated Press,"Indiana creates web site to follow stimulus money," March 3,2009
- ↑ State of Indiana,"What will Indiana's portion of the stimulus money go toward?," retrieved March 10,2009
- ↑ Bill Status, House Bill 1280 (2009)
- ↑ National Taxpayers Union, "A Letter to the Nation's Governors: Ensure Transparency and Accountability by Posting Stimulus Expenditures Online," March 10, 2009
- ↑ Wall Street Journal, "Stimulus Spending by State"
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