Indiana ends budget year in the black; reserves now nearly $2B

2013-07-11T11:30:00Z 2013-07-13T18:01:12Z Indiana ends budget year in the black; reserves now nearly $2BDan Carden, (317) 637-9078
July 11, 2013 11:30 am  • 

INDIANAPOLIS | Indiana spent $482.6 million less than it took in over the past 12 months, and as a result, grew the state's reserve funds to nearly $2 billion.

Gov. Mike Pence and state Auditor Tim Berry, both Republicans, beamed Thursday as they announced the final state revenue and spending results for the 2013 budget year, which ended June 30.

"The balance sheet of Indiana is strong and growing stronger," Pence said. "Our state remains the fiscal envy of the nation: Revenues are coming in higher than projected, reserves are higher than projected, and our bottom line is stronger than projected."

Between July 2012 and June 2013 state revenue totaled $14.73 billion, which was $93 million above the revenue forecast.

The state spent $14.25 billion during the same period, with nearly 60 percent going toward elementary, high school and college education, along with retired teacher pensions.

Indiana's reserve balances ended the year $86 million above expectations. The state's reserves have grown from $1.2 billion in June 2011 to $1.4 billion in June 2012 to $1.94 billion last month.

Pence said the current reserve level of 13.1 percent of planned 2014 spending is line with his reserve goal of 12.5 percent.

He said state lawmakers should think twice before even considering spending the reserves.

"We just came through a very successful session of the Indiana General Assembly where we did our work and we passed a budget that funded our priorities and also provided tax relief for Hoosiers, but I think probably it ought to give Hoosiers the greatest sense of ease and confidence that we were able to do all that and close out our fiscal year with the kind of surpluses that give us breathing room in the event of a downturn in the economy," Pence said.

House Democratic leader Scott Pelath, D-Michigan City, disagreed. He said the Pence tax cuts will amount to maybe just one extra tank of gas for most Hoosiers, while schools and other state services remain badly underfunded.

"The leaders of our state worship these surplus numbers like they are ends in and of themselves," Pelath said. "The fact is that these numbers only matter to the extent that our people are prospering. In that context, these numbers mean nothing."

Pence argued that one only need look across the state line into Illinois to see what happens when elected officials lack spending discipline.

"The state of Illinois right now has $6.1 billion in what is called a bill backlog," Pence said. "The state of Indiana has zero bill backlog ... and Hoosiers should be encouraged by these numbers."

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