Cutting costs

In a time when state deficits are the norm, Indiana has been able to keep its budget in check.

Over the summer, Mitch Daniels was able to do what less than a handful of other states could accomplish – pass a budget on time without increasing taxes. This not only allowed state institutions, like IU, to remain in operation, it also kept Indiana from dipping into its emergency funds and slipping into debt.

Now, new budget cuts that are allowing Indiana to avoid deficits like those seen in California and New Jersey – which register in the tens of billions – are looking to cut spending by an additional 10 percent this fiscal year.

In attempts to cut $250 million from the current budget, Daniels is asking for, among other things, a 5 percent deduction from the amount paid to hospitals to care for Medicaid patients, a reduction in the amount of “automatic” overtime paid to correctional facility workers, and a voluntary reduction in the hours of other state employees.

Although these seem like steep measures, especially to the state hospitals, which are already in a financial blunder, it’s important to note that these are merely cuts.

Daniels’ new budget cuts will not include any layoffs – assuming that all of the industries comply – and that should be a reassuring factor in our current economy.
While other states are hiking taxes and writing IOUs, Indiana has handled the recession with more financial responsibility.

Instead of placing the burden on taxpayers, Daniels has created a budget that will cut portions of funding across the board and not destroy any one program or institution.

According to Anne Murphy, secretary of the Family and Social Services Administration in Indiana, the cuts should save money “without cutting vital services.” While this may be disputed by those who believe funding should remain the same, we are left with few options.

Other alternatives, such as borrowing money or looking to the government for bailouts, don’t present clear, long-term benefits. What good will short-term boosts to these programs do if the money that supports them is unsustainable?

The fact is that no one wants to take or make cuts, but in a time when it’s easier to throw money at your problems regardless of the long-term detriments, we commend Daniels for making the tough decisions to keep Hoosiers employed.

Despite the fact that tax revenues have plunged since the original budget was passed in June, we hope that Daniels will continue to cope with the financial crisis in a frugal manner while preserving Hoosier jobs.

While that might eventually mean a hike in taxes, the main concern should be keeping Indiana residents employed.