State budget heads exhort agencies to tighten belts

2013-10-12T20:32:00Z 2013-10-13T22:17:12Z State budget heads exhort agencies to tighten beltsDan Carden dan.carden@nwi.com, (317) 637-9078 nwitimes.com
October 12, 2013 8:32 pm  • 

INDIANAPOLIS | Indiana budget officials have instructed state agencies and departments to trim expenses where possible in the wake of unexpectedly weak tax revenues.

In a memo issued earlier this month, the heads of the Office of Management and Budget and the State Budget Agency detail some 20 ways agencies can reduce spending to help preserve the state's $2 billion budget reserve.

Their recommendations include limiting travel, carpooling when possible and using video conferencing instead of in-person meetings; issuing required reports online instead of on paper; carefully managing overtime expenses; and using Department of Correction prisoner labor, if appropriate.

Among other suggestions, agencies should ensure they are only paying for telephones and computers actually being used by employees and limit smart phone use to executive-level employees; consolidate office space as much as possible; and acquire only used furniture no longer needed by other departments.

"Agencies should conserve all tax dollars as if the expense was coming out of their own pocket. After all, we are all taxpayers," OMB Director Chris Atkins and Brian Bailey, head of the budget agency, said in the joint memo.

Through the first three months of the 2014 budget year, state revenue has come in $73.5 million, or 2.1 percent, less than predicted by the revenue forecast used by lawmakers to craft the 2014-15 state budget.

In addition, state revenue during the July-September period has totaled $32.7 million, or 0.9 percent, less than the same three-month period last year. By contrast, officials had expected 2.5 percent year-over-year revenue growth.

The Pence administration previously instructed agencies to spend only 97 percent of their appropriations to ensure state revenues exceed spending by at least $150 million when the budget year ends June 30.

Without significant revenue growth in coming months — and October state revenue could be dismal with most Hoosier federal employees not being paid or spending as much during the shutdown —  hitting that target may require deeper cuts.

The state's two largest revenue sources, sales and income taxes, had the biggest shortfalls relative to revenue expectations, along with riverboat wagering taxes for September, the latest month for which statistics are available.

The $23.1 million in state revenue from taxes on bets placed at riverboat casinos was $5.6 million — or 19.5 percent — less than the state expected.

Indiana would have suffered a much larger total revenue miss in September without the addition of $23.5 million paid in inheritance taxes last month.

State lawmakers this year eliminated the inheritance tax retroactive to Jan. 1, but revenue from prior-year deaths continues to trickle in.

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