EDITORIAL: Pence buys future budget flexibility

2013-07-16T00:00:00Z EDITORIAL: Pence buys future budget flexibility nwitimes.com
July 16, 2013 12:00 am  • 

With Indiana looking at a nearly $2 billion surplus, Gov. Mike Pence has taken the right action.

Pence ordered state budget officials to pay off about $66 million in prison debt early. That's a better use of the money than sending small refunds to taxpayers.

"It's appropriate for families to pay down their debts, and I believe it's appropriate for our state government, whenever possible, to pay down our debt," Pence said.

He's right. Paying down debts is good advice for Indiana, just as it is for individuals.

By paying off the Miami Correctional Center debt early, the state will save an estimated $27 million in interest over the next two years.

Since July 2012, Indiana has paid off $282 million in debt for construction or remodeling of state buildings, including the Indiana State Museum in Indianapolis.

Indiana still owes billions of dollars for university construction projects, federal loans for unemployment compensation and other past state decisions. Those debts are gradually being repaid.

Accellerating debt repayment with some of the state's budget surplus will put Indiana in the position in the future where it is able to invest wisely in the state's future.

Anyone in Northwest Indiana could quickly name the Cline Avenue bridge as evidence of the need to address infrastructure issues in Indiana.

Educators are quick to note the $300 million a year in reduced funding for the state's schools.

With implementation of additional provisions of the Affordable Care Act, which has become known as Obamacare, there is uncertainty about how much Indiana could be forced to pay for Hoosiers' health care, especially if the federal government rejects Pence's plan to expand the Healthy Indiana Plan instead of Medicaid. That, too, could become a fiscal concern.

There are many areas where state funding could help solve problems. There will always be demands for more money for operating costs. But by decreasing the state's debt, more money will be available in the future to meet those demands.

It's a big contrast to Indiana's neighbor to the west, where Illinois Gov. Pat Quinn has decided to withhold legislators' pay until they result the massive pension debt problem.

Pence's decision to pay down debt rather than permit refunds to taxpayers keeps a healthy reserve on tap for Indiana and buys future flexibility. It was the right decision.

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