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A State Budget Hoosiers Can Afford Governor Mitch Daniels

A State Budget Hoosiers Can Afford Governor Mitch Daniels. FY09 Revenue Loss $1.5B loss in projected revenue for FY09 since last budget was passed. ($935M). ($1.5B). Composition of FY09 Drop. FY07 vs. FY11. FY11 revenues below FY07 revenues by more than $40M * Projected.

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A State Budget Hoosiers Can Afford Governor Mitch Daniels

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  1. A State Budget Hoosiers Can Afford Governor Mitch Daniels

  2. FY09 Revenue Loss $1.5B loss in projected revenue for FY09 since last budget was passed ($935M) ($1.5B)

  3. Composition of FY09 Drop

  4. FY07 vs. FY11 • FY11 revenues below FY07 revenues by more than $40M * Projected

  5. Actions Taken to Restrain Spending • July 2008: 7% reduction • November 2008: Hiring freeze • December 2008: $767M of additional reductions • Not affected: • Education • Public Safety • Child Protection

  6. Agency Budgets Reduced

  7. Real Per Capita State Government Spending* * Includes Major Moves Investments

  8. Real Per Capita State Government Spending • Indiana improved from 37th in 2004… • to 45th in per capita spending in 2007.

  9. K-12 Cuts in Other States • At least 35 states are either proposing or implementing cuts to K-12 education: • Alabama cut K-12 funding by more than 12%, the biggest cut to education in 48 years • California cut K-12 education by more than 16% • New York’s proposed cuts would lead to cuts of up to 13% for all school districts • Utah cuts may lead to a 12% reduction in per pupil funding by 2010 • Virginia’s Governor proposed cutting public education by more than 9%

  10. STATES CUTTING EDUCATION -7% -3% -2% -3% -3% -8% -13% -1% -1% -7% -7% -1% -1% -3% -1% -4% -3% -12% -5% -1% -9% -16% -3% -4% -5% -13% -3% -14% -5% -3% -13% Cuts -3% No Announced Cuts -11% -4% 10

  11. Higher Ed Cuts in Other States • At least 28 states have implemented cuts to higher education: • Alabama’s cuts in higher education funding have led to a 13% tuition increase at state universities • Louisiana colleges preparing for cuts of 30% in state funding • Tennessee’s colleges and universities facing cuts of 15% in FY10 • Nevada’s Governor has proposed to cut state funding of higher education by 36%

  12. States Cutting Vital Services • At least 34 states have imposed cuts to vital services: • Arizona has laid off 15% of its child protection investigators • California is considering elimination of the Healthy Families Program, which provides healthcare to 928,000 children • Minnesota’s proposed cuts would result in 114,000 fewer people enrolled in state healthcare programs in FY2011 • Washington has proposed to reduce healthcare for poor by 42% • At least 11 states are either proposing or implementing early release of prisoners • Kentucky has released 2,000 prisoners early, including violent offenders and murderers

  13. STATES RAISING TAXES Tax Increase No Tax Increase 13

  14. General Assembly BudgetApril 29, 2009 • Reserves consumed • $1B deficit entering next budget • Increased spending by 3% per year, 14% including stimulus funds

  15. Revenues Down, Spending Up 14% Increase 8% Decline

  16. The Cliff - 2012 $633M + new spending

  17. Governor’s Second Budget • Cuts executive branch agencies by an average of 10% • Maintains funding levels for public safety and child protection • Increases funding for K-12 education and student financial aid • Education Trigger • Maintains more than $1B in reserves

  18. Budget Parameters • No tax increases • Total reserves of at least $1 billion • Spend a dollar, cut a dollar • One time funds for one time purposes • No gimmicks

  19. Bauer Budget • Increases funding for more than 100 programs = $935M • Gimmicks: raids the teachers pension fund and Next Generation Trust Fund • Creates a cliff of more than $1 billion • Wipes out all reserves • Would result in massive tax increase

  20. The Cliff - 2011

  21. Bauer Budget • No tax increases - FAILED • Total reserves of at least $1 billion - FAILED • Spend a dollar, cut a dollar - FAILED • One time funds for one time purposes - FAILED • No gimmicks - FAILED

  22. Senate Budget – Further Compromises • Restores funding for more than 30 programs • Arts Commission, Public Television, Tourism, Heritage Trust, Clean Water Indiana, Public Defender, CHOICE, Area Health Education Centers, Community Health Centers, etc. • Meets all requested parameters • Insurance against shutdown – Continuing Resolution

  23. Bauer’s Choices • A fiscally responsible new budget • Continue under current budget • Shutdown unacceptable

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