By Scott Olson, The IBJ
solson@ibj.com
As expected, Gov. Mitch Daniels today proposed balancing the state's next two-year budget by maintaining current spending levels on several programs while delaying funding for others.
Public safety and public schools are among those that would not receive funding increases. Even so, $180 million in new money would need to be included in the budget just to maintain current spending levels for those priorities, Daniels said.
Other victims of the state's revenue shortage likely will include expansion of full-day kindergarten and the Hoosier College Promise programs, plus the Indiana Economic Development Corp.'s High Growth Fund and its life sciences initiative. The governor proposed funding delays for those programs.
"It will be temporary," he said. "It may last one year; it may last two years. But it won't last longer than that."
Daniels, who unveiled details of his proposal this afternoon to an overflow lunch meeting of the Indianapolis Rotary Club, also specified cuts the state is undertaking to help alleviate the budget shortfall. They include agency budget reductions of 8 percent, no pay raises for state employees and no capital spending projects.
Adopting recommendations made by the nonpartisan Indiana Commission on Local Government Reform in 2007, spending classroom dollars more wisely and cutting higher education budgets by 1 percent also should help trim the deficit, Daniels said.
The current budget that ends June 30 is projected to have a $763 million shortfall, and the governor has ordered $767 million in spending cuts to keep the books balanced.
Yet the governor attempted to put a positive spin on his proposals by comparing Indiana to other states, which appear to be in much worse financial shape.
"Indiana's problems are more manageable than most," he said, "if only we have the will to manage them."
State legislators convene tomorrow for the 2009 session and will begin crafting a two-year budget that takes effect July 1.