Gov. Daniels to make further budget cuts

INDIANAPOLIS – Gov. Mitch Daniels ordered most state agencies to cut their spending even further Thursday to eliminate a projected $763 million spending gap through next June.

No state employees will lose their jobs as a result of the cuts, but they won’t receive 2009 pay raises, and fewer will travel out of state.

Daniels made the cuts after the latest state revenue forecast showed the state collecting $721 million less in tax dollars during the current budget cycle than had been forecast just a year ago.

Some items won’t be affected: The state still will distribute payments to K-12 schools as budgeted, and public safety won’t be cut, Daniels said during a news conference in his office.

But, state universities will lose some of their funding, certain building projects such as new state police posts and state park pools will be put off and a state hiring freeze already in place will continue. No Medicaid recipients will lose coverage, but they might receive less of it.

“There will be lots of people disappointed by these cuts,” Daniels said.

In a rare display of legislative unity, the leaders of each of the four General Assembly political caucuses issued a joint statement supporting Daniels, extending the pay freezes to legislative employees and announcing they would match the governor in cutting their own salaries by 13 percent.

“We are resolved to transcend party lines as we attempt to do our part in guiding the state through this economic storm,” said House Speaker B. Patrick Bauer, Senate President Pro Tem David Long, House Republican Leader Brian Bosma and Senate Democratic Leader Vi Simpson, according to a statement.