Daniels Proposing Real Spending Cuts For State's Two-Year Budget

With at least a billion dollars in fewer revenues anticipated since the budget deal lawmakers reached during the regular session but failed to pass, Gov. Mitch Daniels is proposing an austere two-year budget that will dip only slightly into the state's rainy day fund, $250 million, leaving at least a billion remaining. The Governor's budget takes into account the fact that the state's revenues are running 8% below last year's. Overall, the state's budget will be reduced 2 1/2%. Education funding will only increase slightly, about 2%, while other areas of general government operation will see deep cuts. Those spending reductions include the following:

• State Library (15%)
• Inspector General (13%)
• Department of Health (12%)
• BMV (11%)
• IDEM (11%)
• DHS (10%)
• OMB (10%)
• Faith-Based Initiatives (10%)
• State parks (8%)
• Labor (8%)
• Professional licensing (8%)
• Ag (6%)
• State Board of Accounts (4%)
• Higher Ed (4%)

There will be no cuts in Corrections or the State Police. K-12 education will see its funding increased by 2%, while funding for student financial aid will increase by 3%. I don't see the numbers for social and children services. Daniels noted in his televised budget address tonight that Indiana is one of only 10 states that is not looking at raising taxes this year to deal with its budget woes, unless you include Indiana's increase in unemployment taxes for Indiana businesses.

Gov. Daniels' budget said nothing about a bailout plan for Indianapolis' mismanaged Capital Improvement Board. "If legislators want to spend more on some favorite cause, that's fine as long as they offset it elsewhere," Daniels said. "Add a dollar, cut a dollar. And, of course, no gimmicks, and no tax increases." I'll hold him to that one. One of the ideas being floated to help bail out the CIB is to divert more state tax revenues by expanding the professional sports development area. That could deprive other areas of government spending tens of millions of dollars over the next biennium. Let's see from whom lawmakers plan to take away money in order to provide more subsidies to the billionaire sports team owners. Earlier, Gov. Daniels said he supported a bailout of the CIB and would propose his own plan as part of his new budget. He must have thought better about talking about a topic that is anathema to most taxpayers during his speech tonight.