Indiana's Revenues Continue To Fall

Indiana is looking at $400 million fewer dollars in the state treasury than anticipated at the end of this fiscal year according to the State Budget Agency. The good news is that Indiana has $1.3 billion in reserves, including $390 million in its rainy day fund. In December, Gov. Daniels ordered state agencies to find $763 million in cuts and will look for more cuts after this latest news. The Star quotes House Speaker Pat Bauer describing the financial situation as a crisis and renewed his call to dip into the rainy day fund to pay for budgeted expenses. Sen. Luke Kenley notes that the federal stimulus plan could offset the loss of some of those revenues.

Indiana's financial picture looks bright compared to neighboring Illinois'. The state's Comptroller announced yesterday that Illinois would end its current fiscal year with a $9 billion deficit. Just as outgoing Gov. Rod Blagojevich predicted, Democratic leaders in the state are preparing to enact a massive tax increase to deal with the state's budget woes. The Democrats have controlled the legislature and the governor's office since 2002 but that's not stopping them from laying part of the blame on the state's last Republican governor, who is currently serving time in the federal penitentiary in Terre Haute. "Our previous two governors chose to ignore these things, told us things were good when they weren't and just glossed over the fact the state of Illinois has a multibillion-dollar structural deficit," Comptroller Dan Hynes said.