Indiana state budget (2010-2011)

Indiana had $28.8 billion budget for FY2010-2011.^[1] It was passed in 2009. On July 14, 2010, State Auditor Tim Berry announced the state's FY2010 revenues were $957 million less than lawmakers budgeted.^[2] To make ends meet, state officials cut $669 million in spending. Lawmakers also reduced the state's reserves from $1.3 billion to $830 million, which Gov. Mitch Daniels and state lawmakers projected would last through the end of the the budget cycle which ended June 30, 2011.^[3]

Going into the fiscal year Indiana had a total state debt of $27,563,948,872 when calculated by adding the total of outstanding debt, pension and OPEB UAAL’s, unemployment trust funds and the 2010 budget gap as of July 2010.^[4]

See also: The Indiana State Budget on State Budget Solutions

2011 State spending & deficit in billions^[5]

Total spending	Health and human services	Education	Government	Protection	Transport	Environment	Econ dev
$26.5	$9.3	$10.3	$1	$1.4	$2	$0.3	$1.5

2011 Local spending & deficit in billions^[6]

Total spending	Pension	Health care	Education	Welfare	Protection	Transport	Deficit
$32.8	$0.1	$3.4	$10.4	$1.2	$2.6	$1.7	$32.3

Fiscal Years 2010 and FY2011 State Budget

Find the state’s FY2011 Comprehensive Annual Financial Report (CAFR) compiled by the state government here.

The state ended FY2011 with a $1.2 billion surplus. The surplus was the result of the state collecting $204 million more than it had projected and cuts to services and schools. Gov. Daniels said he planned to keep that money in savings rather than restore cuts made in recent years.^[7] The $1.2 billion surplus was just shy of the amount needed to trigger automatic tax refunds for Hoosiers. The automatic tax refunds kick in when the state has a surplus equal to 10 percent or more of general spending. The $1.2 billion figure amounted to 9.1 percent of spending.^[7]

The state collected $938 million in August 2010, an 8.4% increase compared to the year prior according to the state Budget Agency.^[8] Overall, state revenue was still $2 million less than projected in the budget lawmakers passed in early 2009, and Budget Director Adam Horst predicted that by June 2011, that state's reserves would be $797 million below what was assumed in the budget as it was passed.^[8] In FY2010, Indiana collected $957 million less than budgeted. The state tapped into its rainy day fund of surplus money for nearly $500 million and reduced state spending by $785 million.^[9]

FY2011 General Fund Appropriations^[10]

Category	% of General Fund Appropriations
K-12 Education	49
Higher Education	12
Medicaid	11
Teacher Pensions	5
Corrections	5
Human Services	5
Child Services	4
Other	9

Another fiscal issue facing the state was the impact of the federal health care legislation. In a memo to state legislators on the budget committee dated March 26, 2010, Ryan Kitchell, director of Indiana's Office of Management and Budget, warned that the legislation would have an immediate $25 million impact on the state's budget.^[11]

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 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.^[12]

In early July 2009 the Indiana General Assembly passed a two-year state budget narrowly avoiding a state government shutdown.^[13]

Budget Cuts

In FY2011, lawmakers cut state spending by approximately $600 million.^[14]

State agencies were instructed in April 2010 to cut their spending by another 5 percent during the fiscal year that began July 1 after already chopping 10 percent a few months prior.^[15]

Some cuts included:

• The Department of Transportation said reduced payroll through attrition and without laying off any workers. The fiscal year 2010 budget allowed for more than 4,300 workers, but the department was running with about 3,900 workers. The Department also reduced the motor pool fleet by nearly 300 vehicles over the last 3 years.^[16]

• The Department of Correction said among other changes that reorganized its facilities, decreased the amount of adult education school days and substituted vegetarian enriched meals instead of kosher meals for inmates.^[16]

• The Indiana War Memorials and White River State Park began using inmate labor to reduce costs of park maintenance.^[16]

• Indiana State Fair Commission lost $1.5 million of its $2.1 million state appropriation^[9], but derived the bulk of its $23 million budget from other sources. The fair increased the price of barn leases and charging for some parking. The fair also used more volunteers at events^[16]

• The Indiana Office of Tourism Development's budget was cut by nearly 60%, from $4.4 million down to $2.6 million^[9]

• The Indiana Innovation Alliance, a partnership between Indiana University and Purdue University, lost its entire $10 million budget.^[9]

The state budget committee was also exploring the possible cost savings that would result from schools and public university employees joining the state's public employee health insurance plan.^[17]

Education

Education accounted for 54% of the state budget.^[1]

Gov. Daniels said that he believed that Indiana schools would not see deeper budget cuts in 2011.^[18] The Indiana Department of Education has notified school corporations they can expect the same funding for 2011 that they received in FY2010.^[19]

The FY2010-2011 budget included an education funding trigger that would give schools additional funds if the state collected more money than was expected in a May 2009 revenue forecast. Revenues for FY2010, however, fell $957 million short of previous expectations, meaning schools received no extra money.^[2]

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.^[20]

Indiana is required to pass a balanced budget by statue stating that "no law shall authorize any debt to be contracted", except for "casual deficits" which must be covered by loans "as may be necessary to meet the demands of the state." Indiana law prohibits the state from carrying a deficit from one year to the next. State law creates a spending cap under Section 4-10-21-2, but an exemption from the State spending cap for appropriation exists under Section 4-10-21-7.^[21]

Indiana maintains seven major governmental funds: the General, Motor Vehicle Highway, Medicaid Assistance, Major Moves Construction, State Highway Department, Property Tax Replacement and Tobacco Settlement Funds. The State budgets all seven major funds in addition to more than fourteen other non-major funds.^[21]

Budget figures

The 2009-2011 state budget passed June 30, 2009 by the Indiana General Assembly during the 2009 regular and special sessions provides:^[22]

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

General Fund 2009-10^[23]

Category	FY2009 Amount in millions Actual	FY 2010 Amount in millions Estimated
Beginning Balance	1,050	964
Revenues	13,063	12,191
Adjustments	0	0
Total Resources	14,113	13,155
Expenditures	13,019	12,836
Adjustments	130	0
Ending Balance	964	319
Budget Stabilization Fund	365	369

Fiscal 2010 Tax Collections Compared With Projections Used in Adopting Fiscal 2010 Budgets (Millions)^[23]

Category	Amount
Sales Tax Original Estimate	6,132
Sales Tax Current Estimate	5,932
Personal Income Tax Original Estimate	4,289
Personal Income Tax Current Estimate	3,776
Corporate Income Tax Estimate	800
Corporate Income Tax Estimate	547

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

Fiscal Year	Expenditures (billions)	GDP (billions)
2000	$31.2 [24]	$194.4 [24]
2001	$33.8 [24]	$195.2 [24]
2002	$36.3 [24]	$205.0 [24]
2003	$37.8 [24]	$215.4 [24]
2004	$39.3 [24]	$228.3 [24]
2005	$42.0 [24]	$232.8 [24]
2006	$44.0 [24]	$238.7 [24]
2007	$46.1 [24]	$246.4 [24]
2008	$48.2 [24]	$254.4 [24]
2009	$50.5* [24]	$262.7* [24]

• 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.

2009-2010 budget crisis

See also: State budget crisis, 2009-2010

Indiana faced a budget shortfall of approximately $1.8 billion for FY 2010. ^[25] 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."^[12][26]

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.^[12]

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%.^[27][28]

2008-2009 budget crisis

See also: Indiana state budget (2008-2009)

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.^{[citation needed]}

Ryan Kitchell has been Indiana’s OMB Director since 2007.^[29] 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.^[30]

Tim Berry has been Indiana State Auditor since 2007. The Indiana State Auditor is responsible for:^[31]

• 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.

Budget transparency

Indiana has a new transparency website, the Indiana Transparency Portal (ITP). The state has promised side-by-side comparison of budgeted numbers and actual expenditures during the second quarter of 2011.^[32] Lawmakers said that the website will compile Indiana budget data, spending reports and other financial information that previously had been spread across multiple sites.^[33] The website, however, does not include updated numbers on exactly what cuts have been made since Republican Gov. Mitch Daniels ordered millions of dollars in reductions after the budget was approved by lawmakers and has been criticized for not showing where taxpayer money goes under job incentives through the Indiana Economic Development Corporation.^[33]

In March 2011, the state added agency performance reviews to the ITP and more reports on local government spending.^[34]

See also: Evaluation of Indiana state website or see sample transparency legislation at the Sunshine Standard

Economic Stimulus Transparency

• Indiana received approximately $445 million from the federal government under H.R. 1586, a $26 billion plan to give states money for Medicaid and education that the President signed into law on August 10, 2010.^[35] The state accepted the money even though Republican Gov. Mitch Daniels had previously said it was unnecessary.^[36]

• It is estimated that Indiana will receive at least $3 billion in federal funding.^[37]

• The economic recovery website for Indiana is available here.

One Indiana project was noted in Senator Coburn and Senator McCain's "Summertime Blues, 100 stimulus projects that give taxpayers the blues" report. The Purdue University Airport replace its entire current eight-foot perimeter fence with an eleven-foot fence to keep out wildlife using a Federal Aviation Administration grant worth over $665,000.365, despite the fact that the airport has only had 14 reported incidents of an aircraft striking wildlife since 1990, of which thirteen were birds.^[38]

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.^[39][40]

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.^[41]

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	Y	Y	Y	N	N	N

Support for creation of the database

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

Budget Cut Transparency

[Ballotpedia:Vi Simpson|Senate Minority Leader Vi Simpson]] requested that the Daniels administration make public what state programs are being cut to make ends meet. She said Senate Democrats will seek legislation in the session that begins in January to force more transparency in state government. For one thing, she wants Indiana to follow the lead of 32 other states that post information online about state budgets and expenditures.^[42]

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.

More current source for state employee salaries: http://www.in.gov/itp/2406.htm

See Also

• Indiana government sector lobbying
• Indiana public pensions

External links

• State Budget Solutions, Indiana
• 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

Additional reading

References

v t e State Budgets Cost of state transparency websites • State budget issues • Pubic employee salaries • Public pensions • States with spending online • Glossary of state budget terms Alabama • Alaska • Arizona • Arkansas • California • Colorado • Connecticut • Delaware • Florida • Georgia • Hawaii • Idaho • Illinois • Indiana • Iowa • Kansas • Kentucky • Louisiana • Maine • Maryland • Massachusetts • Michigan • Minnesota • Mississippi • Missouri • Montana • Nebraska • Nevada • New Hampshire • New Jersey • New Mexico • New York • North Carolina • North Dakota • Ohio • Oklahoma • Oregon • Pennsylvania • Rhode Island • South Carolina • South Dakota • Tennessee • Texas • Utah • Vermont • Virginia • Washington • West Virginia • Wisconsin • Wyoming •

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