State Finishes Year With Money In The Bank; Democrats Say Spend Some Of It

INDIANAPOLIS — Republican leaders boasted Thursday as they closed the books on the 2015 fiscal year, saying a $210 million surplus and more than $2.1 billion in the bank is a sign of Indiana’s financial integrity.

But Democrats say the surplus just shows the state is hoarding money that could be used to improve roads and state services, especially for children.

Indiana finished the year on June 30 with a near historic level of reserves – $2.14 billion – coming in just short of the cash on hand in the 2012 fiscal year.

Republican Gov. Mike Pence attributed this success to careful planning and the sound of fiscal management through reversions, which helped the state adjust to fluctuating revenues. But he said the state managed its money while still remaining sensitive to key agencies.

“We required agency reversions of 4.5 percent in Fiscal (Year) ‘15, excluding critical and sensitive agencies like the Department of Child Services and resources that go to preventing domestic violence,” Pence said. “No reversions were requested from those agencies.”

However, the Indiana Democratic Party released a list of agencies that it said reverted funds back to the state’s general fund – which serves as its main checking account – including the State Department of Health, Bureau of Motor Vehicles and the Department of Transportation, among others. The FY 2014-2015 fiscal statement showed reversions totaling to $171.9 million from agencies at the end of the year.

“Time and again they have kept problems in the shadows by providing agencies the bare minimum to keep the ball rolling, said John Zody, chairman of the Indiana Democratic Party. “What Gov. Pence does is create more problems for Indiana and its hardworking families.”

And Pence continued to stress caution.

“I’m very encouraged by the growth in our economy,” Pence said. “But I’m still going to continue to be cautious.”

Still Pence hinted that there could be a potential of relief for some businesses in the next fiscal year. The budget approved by the General Assembly this spring allows Pence to pay back federal unemployment loans – if the state’s cash balance is high enough – a move that would eliminate a tax penalty all Indiana employers are currently paying.

“Any chance I have to let Hoosiers keep more of what they earned is always a priority for this administration,” Pence said. “And frankly with near record budget reserves, with revenues coming in strongly, we’re giving some consideration to some tax relief for job creators that could be facilitated by paying off the state’s obligation to the unemployment trust fund early.”

Pence said he was not yet committing to providing this relief. But he said he is aware that it would make it possible for businesses to have more resources, hire more Hoosiers and build more momentum in the economy.

Indiana is one of only 11 states to maintain a triple-A credit rating with all three major credit rating agencies. Pence boasted that the state launched the Healthy Indiana Plan 2.0 without spending any money from the state’s general fund and has enrolled nearly 290,000 Hoosiers in the health care plan. The state also paid off debt for the Miami Correctional facility, even as tax revenue failed to meet projections in most months of the year.

“In the midst of the revenue turbulence we hit this year, it’s important I think for Hoosiers to know that it didn’t stop us from not only maintaining a strong balance sheet and funding the priorities from our budget but also there were additional initiatives,” he said.

Despite the governor’s positive outlook on the fiscal year closeout, Rep. Gregory Porter, D-Indianapolis, released a statement saying the governor’s announcement Thursday was “nothing but a pat on the back for those in charge of the state treasury.”

“While we are thankful for a robust surplus, we are saving way too much money at the expense of funding tangible needs for our state,” Porter said. “What continues to stand out about these yearly announcements is the absolute lack of ambition our Republican leadership shows in anything except squirreling your tax dollars away. There are serious problems facing our state, and yet we toss those concerns aside to gloat over a magic figure of $2 billion.”

Porter said the money the state is saving could be used to help Hoosiers.

“With an extra $12 million or so, we could add pre-school programs for five or six more counties,” he said. “Throw in an extra $80 million and we could double the amount of money that local units of government can use to fill potholes and fix a few streets. Heck, some of them could even use that money to help make some flooded roads passable and maybe allow farmers to get whatever crops they have left to market.”

Amanda Creech is a reporter for TheStatehouseFile.com, a news website powered by Franklin College journalism students.