Indiana agencies, higher education likely face further budget cuts due to spending hold back orders

State agencies are likely to face more cuts in the upcoming fiscal year that begins July 1 because of spending requirements from the legislature included in the new budget.

Almost every state agency already received a 5 percent funding cut in the new state budget.

But language in the budget bill, HEA 1001, also requires every state agency and public college and university to withhold an additional 5 percent of their funding for each of the next two fiscal years.

That's not an uncommon practice in Indiana, as the government often looks to revert money back to its coffers at the end of each fiscal year. This language is a little different in that agencies and higher education institutions won't have their usual flexibility to determine where that money will come from.

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The budget bill says the 5 percent hold backs must come from salaries, wages and operating expenses.

And in a recent memo, State Budget Director Chad Ranney said agencies shouldn't expect to get that money back.

Brandon is our Statehouse bureau chief. Contact him at bsmith@ipbs.org or follow him on Twitter at @brandonjsmith5.