Dipping too early

The budget is possibly the most important bill in the legislature this year because it lays out the state’s spending priorities, dictating who gets what and how much.

Unfortunately, the one-year Indiana budget that railroaded through the democratically controlled House last week proposes to spend too much and for the wrong causes.  

The budget calls for more than $14.5 billion in 2010. Despite federal stimulus money on the way, the House wants to increase our state budget.

To make matters worse, they propose to fund the increase in part by taking money out of the Rainy Day Fund.

To his credit, Gov. Mitch Daniels has brought Indiana a surplus of a little more than $1 billion. And specifically, his Rainy Day Fund cannot be emphasized enough.
Governments are always spending every dollar they have and more on services, so they rarely have rainy day money saved up.

Since the financial crisis broke late last year, there have been massive amounts of foreclosures, which means much fewer property taxes for the state.

Many cities and states that were suddenly hit with huge losses in tax revenue are struggling to stay afloat or have dramatically scaled back vital services. Luckily, we have a fund to ride out the economy until it picks back up, and fortunately we have not had to pull from that fund yet.  

Since we can only speculate on when the economy will pick back up, we should only take money from the Rainy Day Fund or the Tuition Reserve Fund if we absolutely need it. In this budget a lot of money would go to state university projects – an increase in $785 million – even though Daniels only proposed to cut higher-education funding by about 4 percent overall.

Such spending increases were apparently based on the logic that “it creates jobs.”  
Meanwhile, the budget doesn’t even address the desperate need for more prison space, which could also create jobs.  

The Department of Correction says that more prison space is urgently needed due to the rise in the number of violent offenders. Inmates are already being double- and triple-bunked. If prisons get too crowded, then some inmates are actually let go.

For instance, Federal Judges recently ruled California’s overcrowded prison system “unconstitutional,” and will be ordering the release of inmates in order to create adequate space for other inmates. In fact, California might be ordered to cut back its prison population by as much as 40 percent.

The budget calls for us to dip into our precious reserves in order to finance spending priorities that are skewed – giving money to services that don’t need it while neglecting those that really do.