Indiana

Budget Blues

By Abdul Hakim-Shabazz

Indiana Governor Mitch Daniels unveiled his budget blueprint to lawmakers Thursday.   Administration officials say nearly $28 billion plan holds the line on spending, does not raise taxes and leaves a reserve of about $725 million.

There are cuts.   Higher education takes a 3-percent cut and the state is ending adult Medicaid coverage in the areas of dental care, chiropractics podiatry and hearing aids.   K-12 school funding has also been flat-lined, although critics have tried to label the move as a cut since schools lost $300 million in the last biennial budget and that funding would not be restored.

The Governor told me Thursday that although balancing a budget is never a simple task, this year was actually easier than others since many of the reductions were made in previous budget years and the state has learned to do more with less as those reductions have become the new baseline for spending.

There are some budget transfers, such as $200 million from the public deposit insurance fund.  And the Governor also wants taxpayers to get an automatic refund when state reserves top 10 percent.

Administration officials say they expect some changes by Indiana lawmakers, however with all parties in agreement that a tax increase is off the table, there’s going to be a lot of shuffling the money around in order reach a budget that’s truly balanced and leaves a few bucks in the bank for a rainy day.

And say what you will about Daniels,  but Indiana is in much better shape than a lot of other places. However, don’t expect that to last long because officials say that with the new health care reform law coming into effect, they expect practically every new state tax dollar with go for Medicaid.

Full post as published by Indiana Barrister on January 14, 2011 (boomark / email).