A severe budget proposal

In reviewing Gov. Mike Pence’s proposed state budget, it is easy to get caught up in the “firsts.” Under his plan, education, Medicaid and transportation spending will all increase.

While this kind of movement is certainly in the right direction, Pence’s budget pats itself on the back for maintaining an increase in spending less than the rate of inflation — that is, an increase in name only.

It’s fair to say a budget increase less than the anticipated rate of inflation is actually a budget decrease in constant dollars.

Gov. Pence’s budget has two main centerpieces. The first is a one-percent increase in funding for education.

Many people have praised Pence for proposing any increase in funding for education, the first time in many years. However, it’s important to identify just what this increase is, a token.

When compared to per capita education spending in neighboring states like Michigan and Illinois, Pence’s proposed increases barely keep us on par, and they don’t even come close to making up for the funding losses during the Daniels administration.

Second, Pence proposes a 10-percent tax cut across the board for all Hoosiers. According to Pence’s State of the State address, this will make Indiana the “lowest taxed state in the Midwest.”

I can only assume his speechwriters misspelled the phrase “most austere.”

In his budget, Pence argues that his austerity efforts are “directly related to creating an environment amenable to job growth, new investment and new opportunity for Hoosier workers and families.”

What he forgets to mention is for at least the last five years this simply hasn’t worked.
GDP change indices measure the change in a state’s gross domestic product in real dollars. Relative to the base year 2000, Indiana ranks 42nd in growth among the 50 states and the District of Columbia.

Before the financial collapse of 2008, Indiana ranked 28th.

Relative to the rest of the country, Indiana’s recovery has been stagnant under the severe budgetary policies of former governor Mitch Daniels. You simply can’t blame the results of state-to-state comparisons on any federal politician (read “Barack Obama”).

So far, Gov. Pence has made it clear he intends to more or less stay the path.
We can attract businesses to this state. But to do so, we must stand out from the crowd.

We must show the rest of the country that Indiana doesn’t just match the commitments of its neighbors to its children’s education, it exceeds them.

We must stop disguising our budget reductions as budget increases and actually increase our funding of these programs.

We must elect leaders who are not demagogues bent on tax cuts and deregulation, but rational men and women who prioritize the education of children and the future of this state over the immediate and fleeting popularity of a reduction in taxes and 200 more poverty-line jobs 20 miles east of nowhere.

If we can do that, we can finally begin to thrive.

Until then we’ll remain relegated to the stack of good-intentioned, but barely-growing, states at the bottom of the rankings.

— drlreed@indiana.edu