Squeezing the state budget

Most students are probably not interested in discussing the nuances of Indiana’s state budget right after winter break.

Yet an important fight will brew as Indiana Gov. Mitch Daniels and the soon-to-convene Indiana State Legislature brawl over the next budget. Such a fight may bring cuts to K-12 and higher education spending.

Going into this fight, it is important to note two things.

The first is that Indiana, unlike most other states right now, has a significant surplus. That surplus totals about $1.3 billion.

The second is that Indiana’s government is divided; Democrats control the Indiana House of Representatives. Daniels and House Speaker Pat Bauer will pledge cooperation even while simultaneously seeking to undermine one another’s proposals.

Bauer thinks we should start spending some of the surplus now to help create jobs while maintaining social spending when we may need it now more than ever. 

Bauer’s argument has some merits. Thriftiness can compound an economic slump as consumers and businesses alike hoard all their cash. That’s why governments are sometimes encouraged to increase their spending against the pressures of an economic recession.

This recession, however, is taking place across the country, and now the entire world. Indiana can’t spend its way out of a slump, and if we squander our surplus only to see the economic situation get worse, we will simply have to make deeper cuts. Daniels is right to make smaller cuts now.

State revenues are down and may be down for a long time. Tough choices lie ahead, but must Daniels say “no” to everything?

Daniels listed about 50 cuts to trim more than $763 million from the state budget, including cuts in university spending. Most of that savings could come from delays in building repairs or renovations, but the recessions could start to put upward pressure on tuition costs.

Daniels is also backing off from his program that would have promised two years of community college to all Indiana high school students with good performance, another shame.

The surplus is not a get-out-of-jail-free card. We worked hard to get it. We should work hard to make sure we don’t waste it.

Education is a long-term investment. If Indiana gets behind on education it will be hard to catch up.

Daniels claims he won’t let public education for grades K-12 slide, but with inflation, it may get a de facto spending cut. The governor has also said he will have to postpone the complete implementation of full-day kindergarten.

If these cuts really do prove necessary, it will be disappointing.