Daniels releases new budget

Just because Indiana had a budget surplus last year does not mean it has money to spend.

Gov. Mitch Daniels introduced his new budget plan for Indiana during the Indianapolis Rotary Club luncheon Tuesday. Daniels took office as governor in 2005 and has since worked to balance the state budget.

Daniels said Indiana is one of the six states along with Alaska, West Virginia, Colorado, North Dakota and Texas that does not have a budget shortfall. Though the state government has improved its budget, unemployment rates are climbing because of recent problems in the auto industry.

Speaking to a crowd of more than 300 Rotary Club members and guests, Daniels emphasized that the actual tax revenues for 2009 will be lower than expected. Daniels called for a change in spending, but not at citizens’ expense. Daniels said many states are cutting corners by letting prisoners out of jail early, citing it posed a danger to society.

“There are real human consequences if you mishandle people’s money,” Daniels said.

The state revenue for 2010 to 2011 will be an estimated $28.345 billion and will leave $1.3 billion in reserves. Daniels said the state needs to keep that money onhand in case of a crisis.

To save money for the state, Daniels proposed to cut agency budgets by 8 percent, eliminate pay raises for sate employees in 2009 and reducing or eliminating programs such as tourism programs, the Fine Arts commission, public broadcasting, waste tire re-use fund and the Indiana Higher Education Telecommunication System.

Daniels also said he wants to postpone state initiatives such as funding for full-day kindergarten, the Hoosier College Promise program, and the Life Sciences Initiative.

One area in which Daniels said he does not wish to see cuts is K-12 education. He said plans that work to reform education spending to ensure more money go to the classroom instead of administrative costs. He said he hopes with more efficient spending the state can afford to hire up to 3,000 more teachers.

“The education system must be a learning system for children, not an employment bureau for adults,” Daniels said.

Daniels added that other funding priorities are public safety, Medicaid and child protection services.

Daniels also said while there is a possibility of federal funding, nothing is certain yet.

“At this point, we don’t know when, we don’t know how much or under what terms federal money will come,” hesaid.

Daniels hopes to use any federal funding toward public works projects such as roads, bridges and sewers and wants to focus aid on long-term investments such as education.

During a question-and-answer session after his speech, Daniels addressed the state of higher education funding in Indiana and said a college tuition program to guarantee Indiana students two years at Indiana’s community college, Ivy tech, is a possibility in the future.

Concluding his speech, Daniels said he felt that Indiana’s problems were more manageable than most other states’ problems and that Indiana had the possibility to come out of the recession stronger if it managed its budget.

Rotary Club member Ron Baker said he was happy with the plan and thought it was straight forward. He said he is still concerned about the recession, which has affected his business.

“I don’t think this is going to be over as soon as people think it is,” Baker said. “It is challenging us to work in different ways and restructure.”

Matthew Will, Rotary Club member and a finance professor at the University of Indianapolis, said higher education will have to cut costs in the next few years.

“We’re going to have to tighten our belts just like everybody else,” he said. “But, luckily, these past few years of financial responsibility are going to make these choices much less painful than in other states.”

As for other budget cuts, Will said they are necessary for the state.

“I wish nothing would have to be cut, but we don’t live in those times,” Will said. “We have to cut things in order to survive financially.”