GREENFIELD | Gov. Mitch Daniels said Tuesday he generally supports a federal stimulus package that would include some money for Indiana and other states, particularly for infrastructure projects such as highways and bridges.
Daniels was among about 40 governors who met with President-elect Barack Obama in Philadelphia to discuss the impact the faltering economy is having on states. Obama told them he wants their help in designing a package to help states cope with the recession as part of an overall economic recovery plan that also would include tax cuts.
Although Indiana has a balanced budget and a surplus, many states face shortfalls and are seeking federal funds. Indiana's revenue collections for the first five months of this fiscal year -- the second year of the current two-year budget -- are slightly below levels for the same period last year.
Some governors have asked for at least at least $40 billion to help pay for health care for the poor and disabled and perhaps $136 billion more in infrastructure projects like road and bridge repairs in the legislation, which Democrats hope to have ready for Obama's signature as soon as he takes office on Jan. 20.
Daniels has not signed onto a specific request for states, but said it was likely a stimulus package would be approved quickly. He said he was hopeful that it would focus on putting more people to work immediately.
"I think that ought to be the touchstone, not to bail out states that spent more than they should have, and that clearly has gone on in many cases," Daniels said after returning to Indiana Tuesday afternoon. "But if it particularly concentrates on infrastructure, then I think it has some potential to help and we will clearly try to put it to good use in Indiana."
Daniels said Indiana is in better shape than other states when it comes to infrastructure funding. He was referring to the $3.8 billion the state received for leasing the Indiana Toll Road -- money that is largely paying for highway and other transportation projects.
"Indiana may be better fixed here than any other state in the union, but we have plenty of other projects and if Congress sends us a check, we will cash it," he said.
Obama pledged a partnership with governors, Republicans and Democrats alike.
"As president, I'm not simply asking the nation's governors to help implement our economic plan," he said.
"I'm going to be interested in you helping to draft and shape that economic plan."
Daniels said he did not necessarily oppose the federal government temporarily increasing funding for Medicaid, the state and federal health care program for the poor and disabled. But he said it needed to be done carefully or some states might use the money as a way of not making spending cuts elsewhere.
"Don't take this money as a means of skating on decisions you should probably be making anyway," Daniels said.
He said if the federal government boosts highway funding for the states, it should not be distributed under the current formula. Under that system, he said, Indiana receives 92 cents back for every dollar in federal gas taxes it sends to Washington, while some states get $2 to $3 back.
Indiana finished the fiscal year that ended June 30 taking in about $321 million more in revenue than it spent. That figure would have been lower had spending restraints ordered by Daniels not resulted in $133 million in savings. Agencies were ordered to spend less, some projects were delayed and some employee vacancies were not filled.
State government ended the last fiscal year with nearly $600 million in its main checking account. That combined with savings accounts left the state with a budget surplus of about $1.4 billion.
But agencies have been ordered to curtail spending by 7 percent this fiscal year in hopes of maintaining a balanced budget.
Last week, Daniels asked the federal government for a loan of up to $330 million during the next three months to shore up the state's unemployment fund. It has paid out $242 million more in claims this year than it collected in employer taxes. The fund's balance has steadily declined from $1.6 billion in 2000 to $21 million at a time when more than 75,000 Indiana residents are drawing unemployment benefits.
Recent preliminary figures by the U.S. Bureau of Labor Statistics put Indiana's unemployment rate at 6.4 percent. It was the same rate in August -- equaling the highest level since February 1987.
Indiana has lost 32,300 jobs this year, and there were 12,300 fewer jobs in October than in September.
