Difference between revisions of "Indiana state budget"

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{{budget infobox2|
{{budget infobox|
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| state = Indiana  
state = Indiana |
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| image = Flag of Indiana.png|
image = Flag of Indiana.png|
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| budgetcal =  
budgetcal = Biennial |
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| fiscalyear =  
fiscalyear = 2012-2013 |
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| credit=  
datelaw= May 10, 2011|
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| percentchangedr =   
lasteraltered = |
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| expenses =
revenue =  |
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| all funds expenses =
percentchangedr =  |
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| spending change =
expenses = $28.3 billion|
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| change =  
all funds expenses = |
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| governor = Mike Pence
percentchanged = |
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| % federal =
}}
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| state debt =
Indiana operates on a biennial budget cycle. Its fiscal years starts on July 1 and it is currently in FY2013
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| per cap debt =
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}}{{tnr|limit=3}}This page contains information about '''budget processes and policy issues''' in [[Indiana]], including:
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* A summary of the budget drafting process
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* Trends in revenues and expenditures
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* Current fiscal year budget developments
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* Financial transparency measures
  
[[Indiana]] started a new budget biennium, FY2012-13, on July 1, 2011. The [[Indiana General Assembly|legislature]] passed a $28.3 billion budget for the biennium and [[Mitch Daniels|Gov. Mitch Daniels]] signed the budget into law on May 10, 2011.<ref>[http://www.ibj.com/daniels-signs-80-bills-into-law-including-budget/PARAMS/article/27091 Indianapolis Business Journal "Daniels signs 80 bills into law, including budget" May 10, 2011]</ref> Highlights of the budget include that it does not raise taxes or fees, increases education funding and its creation of a taxpayer refund provision.<ref name=forbes/>  At the end of FY2012, the state reported a surplus of  $2.15 billion, an amount equal to 15.9% of expenditures.<Ref name=auditor>[http://www.in.gov/auditor/files/FY2012_year_end_close.pdf Release by Tim Berry, Indiana Auditor of State "Indiana State Government Reports $2.15 Billion Reserve Balance" July 12, 2012]</ref>
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==Budget process==
 +
The state operates on a biennial budget cycle. The sequence of key events in the budget process is as follows:<ref>[http://www.ncsl.org/issues-research/budget/state-experiences-with-annual-and-biennial-budgeti.aspx ''National Conference of State Legislatures'' "State Experiences with Annual and Biennial Budgeting," updated April 2011]</ref><ref name=process>[http://www.nasbo.org/sites/default/files/BP_2008.pdf ''National Association of State Budget Officers'' "Budget Processes in the States, Summer 2008," accessed February 21, 2014]</ref>
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# In '''May''' of the year preceding the beginning of the new biennium, budget instructions and guidelines are sent to state agencies.
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# In '''August''', agencies submit their budget requests to the [[Governor of Indiana|governor]]
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# Hearings are held with state agencies from '''September''' to '''November'''.
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# Public hearings on the budget are held from '''September''' to '''March'''.
 +
# The governor submits his or her budget to the [[Indiana State Legislature|state legislature]] in '''February'''.
 +
# The legislature typically adopts a budget in '''April''', effective for the fiscal biennium beginning in '''July'''. A simple majority is required to pass a budget.
  
Indiana has a total state debt of approximately $37,127,700, when calculated by adding the total of outstanding official debt, pension and other post-employment benefits (OPEB) liabilities, Unemployment Trust Fund loans, and the FY2013 budget gap.<ref>[http://www.statebudgetsolutions.org/publications/detail/state-budget-solutions-third-annual-state-debt-report-shows-total-state-debt-over-4-trillion State Budget Solutions "State Budget Solutions' third annual State Debt Report shows total state debt over $4 trillion" Aug. 28, 2012]</ref> The debt total is less than the prior year's total of $38,710,138,000.<Ref>[http://www.statebudgetsolutions.org/publications/detail/report-reveals-aggregate-state-debt-exceeds-4-trillion-2 State Budget Solutions “Report reveals aggregate state debt exceeds $4 trillion” Oct. 24, 2011]</ref>
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There are no constitutional or statutory provisions mandating that the governor must submit or the legislature must pass a balanced budget. Budget deficits may be carried over to the next biennium.<ref name=process/>
  
Indiana's total state debt per capita is $5,697.12.<ref>[http://www.statebudgetsolutions.org/publications/detail/state-debt-more-than-37000-per-private-worker-13000-per-capita State Budget Solutions "State debt more than $37,000 per private worker, $13,000 per capita" Oct. 2, 2012]</ref>
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The governor cannot exercise line item veto power over the budget passed by the legislature.<ref name=process/>
  
:: ''See also: [http://www.statebudgetsolutions.org/state/detail/Indiana The Indiana State Budget on State Budget Solutions]''
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Indiana maintains seven major governmental funds: the General, Motor Vehicle Highway, Medicaid Assistance, Major Moves Construction, State Highway Department, Property Tax Replacement and Tobacco Settlement Funds. The state budgets all seven major funds in addition to more than fourteen other non-major funds.<ref name=watch>[http://indiana.statebudgetwatch.org/2009/12/29/indiana-budget-analysis/ Indiana Budget Analysis]</ref>
  
==Federal Aid to State Budget==
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==Expenditures==
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===Definitions===
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{{Budget types background}}
 +
===2013 expenditures===
 +
[[File:Indiana total expenditures 2013.png|right|thumb|500px|Breakdown of expenditures in FY 2013.<small><br>'''Source:''' [http://www.nasbo.org/ National Association of State Budget Officers]</small>]]
 +
The table below breaks down expenditures for fiscal year 2013 (comparable figures from surrounding states are provided to give additional context).<ref name=expenditures2013>[http://www.nasbo.org/sites/default/files/State%20Expenditure%20Report.pdf ''National Association of State Budget Officers'' "State Expenditure Report, 2011-2013," accessed February 21, 2014]</ref> Figures for all columns except "Per capita expenditures" are rendered in millions of dollars (for example, $2,448 translates to $2,448,000,000). Figures in the column labeled "Per capita expenditures" have not been abbreviated.
  
The chart below represents how much of the state’s budget comes from the federal government.<ref>[http://taxfoundation.org/blog/monday-map-federal-aid-state-budgets ''Tax Foundation'' "Federal Aid to State Budgets," Accessed August 23, 2013]</ref> The number is the corresponding ranking in relation to the rest of the nation (if #1, the state receives the highest percentage of federal funding in the nation):
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{| class="wikitable" style="text-align:center; width:55%;"
{| class="wikitable sortable"
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! colspan="7" align="center" style="background-color:#008000; color: white;" | Total state expenditures, FY 2013 ($ in millions)<ref name=expenditures2013/>
| align="center" style="background:#f0f0f0;"|'''State'''
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| align="center" style="background:#f0f0f0;"|'''2008'''
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| align="center" style="background:#f0f0f0;"|'''2009'''
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| align="center" style="background:#f0f0f0;"|'''2010'''
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| align="center" style="background:#f0f0f0;"|'''2011'''
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|-
 
|-
| Indiana || 28.54% (#29) || 31.46% (#33) || 34.89% (#32) || 34.53% (#30)
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! valign="bottom" style="background-color:#444; color: white;" | State
|}
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! valign="bottom" style="background-color:#444; color: white;" | General fund
*Figures were calculated by dividing each state’s intergovernmental revenue into its general revenue.<ref>[http://www.census.gov/compendia/statab/cats/state_local_govt_finances_employment/federal_aid_to_state_and_local_governments.html '''US Census''' Federal Aid to State and Local Governments]</ref><ref>[http://taxfoundation.org/blog/monday-map-federal-aid-state-budgets ''Tax Foundation''' "Monday Map: Federal Aid to State Budgets. Accessed October 15, 2013]</ref>
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! valign="bottom" style="background-color:#444; color: white;" | Federal funds
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! valign="bottom" style="background-color:#444; color: white;" | Other funds
 +
! valign="bottom" style="background-color:#444; color: white;" | Bonds
 +
! valign="bottom" style="background-color:#444; color: white;" | Total
 +
! valign="bottom" style="background-color:#444; color: white;" | Per capita expenditures
 +
|-
 +
|'''Indiana''' || '''$14,189''' || '''$10,357''' || '''$3,220''' || '''$0''' || '''$27,766''' || '''$4,225.60'''
 +
|-
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|[[Illinois state budget|Illinois]] || $29,260 || $15,407 || $19,825 || $1,955 || $66,447 || $5,158.07
 +
|-
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|[[Michigan state budget|Michigan]] || $9,164 || $19,295 || $20,107 || $182 || $48,748 || $4,926.22
 +
|-
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|[[Ohio state budget|Ohio]] || $31,514 || $12,630 || $12,950 || $1,174 || $58,268 || $5,035.78
 +
|-
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|[[Wisconsin state budget|Wisconsin]] || $14,042 || $10,815 || $17,912 || $0 || $42,769 || $7,447.53
 +
|-
 +
|align="left" colspan="8" | <small>Per capita figures are calculated by taking the state's total expenditures and dividing by the number of state residents according to United States Census estimates.<ref name=2013census/><ref name=2009census>[https://www.census.gov/popest/data/historical/2000s/vintage_2009/index.html ''United States Census Bureau'' "Vintage 2009: Annual Population Estimates," accessed February 26, 2014]</ref><br>'''Source:''' [http://www.nasbo.org/ National Association of State Budget Officers]</small>
 +
|}
  
==Fiscal Years 2014-15 State Budget==
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===Expenditures by function===
 +
[[File:Indiana expenditures by type 2012.png|right|thumb|500px|Breakdown of expenditures by function in FY 2012.<small><br>'''Source:''' [http://www.nasbo.org/ National Association of State Budget Officers]</small>]]
 +
State expenditures in Indiana can be further broken down by function (elementary and secondary education, public assistance, etc.). Fiscal year 2012 data is included in the table below (information from neighboring states is provided for additional context). Figures are rendered as percents, indicating the share of the total budget spent per category.
  
On Jan. 15, 2013, Gov. Mike Pence introduced his proposed $29 billion biennial state budget.<ref name=submits>[http://www.southbendtribune.com/news/sbt-pence-submits-lean-state-budget-with-new-tax-cut-20130116,0,21248.story The South Bend Tribune "Pence submits lean state budget with new tax cut" Jan. 16, 2013]</ref> The proposal spends $14.4 billion in FY2014 and $14.6 billion in FY2015.<Ref name=raises>[http://www.indystar.com/article/20130115/NEWS05/301160307/Pence-wants-more-spending-education-Medicaid-transportation The Indianapolis Star "Indiana Gov. Mike Pence budget raises education, Medicaid, transportation spending" Jan. 15, 2013]</ref> It increases state funding by about $200 million each year, or roughly 1.4 percent.<ref name=submits/>
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{| class="wikitable" style="text-align:center; width:55%;"
 +
! colspan="8" align="center" style="background-color:#008000; color: white;" | Expenditures by function, FY 2012 (as percents)<ref name=expenditures2013/>
 +
|-
 +
! valign="bottom" style="background-color:#444; color: white;" | State
 +
! valign="bottom" style="background-color:#444; color: white;" | Elementary and secondary ed.
 +
! valign="bottom" style="background-color:#444; color: white;" | Higher ed.
 +
! valign="bottom" style="background-color:#444; color: white;" | Public assistance
 +
! valign="bottom" style="background-color:#444; color: white;" | Medicaid
 +
! valign="bottom" style="background-color:#444; color: white;" | Corrections
 +
! valign="bottom" style="background-color:#444; color: white;" | Transportation
 +
! valign="bottom" style="background-color:#444; color: white;" | Other
 +
|-
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|'''Indiana''' || '''32.9%''' || '''6.5%''' || '''1.5%''' || '''27.3%''' || '''2.9%''' || '''9.3%''' || '''19.7%'''
 +
|-
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|[[Illinois state budget|Illinois]] || 15.8% || 5.5% || 0.1% || 19.7% || 2.2% || 8.5% || 48.1%
 +
|-
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|[[Michigan state budget|Michigan]] || 27.2% || 4.1% || 0.9% || 26.1% || 4.7% || 6.9% || 30.2%
 +
|-
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|[[Ohio state budget|Ohio]] || 20.6% || 4.2% || 1.5% || 24.4% || 3.1% || 5.1% || 41.2%
 +
|-
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|[[Wisconsin state budget|Wisconsin]] || 16.7% || 14.1% || 0.4% || 16.5% || 2.9% || 6.9% || 42.5%
 +
|-
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|align="left" colspan="8" | <small>'''Source:''' [http://www.nasbo.org/ National Association of State Budget Officers]</small>
 +
|}
  
Highlights of the governor's budget include:
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===Expenditure trends===
* a $790 million cut in the state's personal income tax, although lawmakers have not been enthusiastic about the idea;<ref name=submits/>
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Between 2008 and 2012, state expenditures for for elementary and second education rose by over nine percent. Likewise, Medicaid spending rose by more than five percent. Meanwhile, higher education fell by 1.4 percent during the same period. The table below details changes in expenditures from 2008 to 2012.<ref name=expenditures2013/><ref name=expenditures2011>[http://www.nasbo.org/sites/default/files/2010%20State%20Expenditure%20Report_0.pdf ''National Association of State Budget Officers'' "State Expenditure Report, 2009-2011," accessed February 24, 2014]</ref><ref name=expenditures2012>[http://www.nasbo.org/sites/default/files/State%20Expenditure%20Report%20%28Fiscal%202010-2012%29.pdf ''National Association of State Budget Officers'' "State Expenditures Report, 2010-2012," accessed February 24, 2014]</ref><ref name=expenditures2009>[http://www.nasbo.org/sites/default/files/2009-State-Expenditure-Report.pdf ''National Association of State Budget Officers'' "State Expenditure Report, 2009," accessed February 24, 2014]</ref><ref name=expenditures2008>[http://www.nasbo.org/sites/default/files/FY08%20State%20Expenditure%20Report.pdf ''National Association of State Budget Officers'' "State Expenditure Report, 2008," accessed February 24, 2014]</ref> Fiscal year 2012 data is included in the table below. Figures are rendered as percents, indicating the share of the total budget spent per category.
* a $267 million structural surplus in 2014 and a $237 million surplus in 2015, in addition to the state's $2 billion reserve;<ref name=raises/>
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* shifting excess state reserves used to pay down pension liabilities to create a new transportation investment fund;<ref name=submits/>
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* increasing Medicaid funding by $200 million each year, although it does not include funds for Medicaid expansion under the federal Affordable Care Act. ;<ref name=raises/>
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* increasing K-12 education spending and higher education aid by 1 percent each year;<ref name=submits/>
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* $64 million in grants for schools that perform well on a trio of state metrics;<ref name=submits/>
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* $35 million more for the embattled Department of Child Services to hire more caseworkers and other staff.<ref name=submits/>
+
  
==Fiscal Years 2012-13 State Budget==
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{| class="wikitable" style="text-align:center; width:65%;"
* '''See past [[Archived Indiana state budgets|state budgets]]'''
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! colspan="8" align="center" style="background-color:#008000; color: white;" | Expenditures from 2008 to 2012 (as percents)
 +
|-
 +
! valign="bottom" style="background-color:#444; color: white;" | Year
 +
! valign="bottom" style="background-color:#444; color: white;" | Elementary and secondary ed.
 +
! valign="bottom" style="background-color:#444; color: white;" | Higher ed.
 +
! valign="bottom" style="background-color:#444; color: white;" | Public assistance
 +
! valign="bottom" style="background-color:#444; color: white;" | Medicaid
 +
! valign="bottom" style="background-color:#444; color: white;" | Corrections
 +
! valign="bottom" style="background-color:#444; color: white;" | Transportation
 +
! valign="bottom" style="background-color:#444; color: white;" | Other
 +
|-
 +
|2012 || 32.9% || 6.5% || 1.5% || 27.3% || 2.9% || 9.3% || 19.7%
 +
|-
 +
|2011 || 32.2% || 7.1% || 1.4% || 25.0% || 2.9% || 10.9% || 20.4%
 +
|-
 +
|2010 || 32.4% || 7.1% || 1.4% || 23.1% || 2.9% || 10.6% || 22.4%
 +
|-
 +
|2009 || 28.1% || 7.3% || 1.3% || 21.8% || 2.9% || 9.2% || 29.4%
 +
|-
 +
|2008 || 23.5% || 7.9% || 1.4% || 21.7% || 3.0% || 10.3% || 32.2%
 +
|-
 +
|style="background-color:black; color:white"|'''Change in %'''
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| style="background-color:black; color:white" align="center"|'''9.4%''' || align="center" style="background-color:black; color:white"|'''-1.4%'''|| align="center" style="background-color:black; color:white"| '''0.1%''' || align="center" style="background-color:black; color:white"|'''5.6%''' ||align="center" style="background-color:black; color:white"| '''-0.1%''' || align="center" style="background-color:black; color:white"|'''-1% ''' || align="center" style="background-color:black; color:white"|'''-12.5% '''
 +
|-
 +
|align="left" colspan="8" | <small>'''Source:''' [http://www.nasbo.org/ National Association of State Budget Officers]</small>
 +
|}
  
The FY2012-13 state budget as enacted can be found [http://www.in.gov/sba/2572.htm here].
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==Revenues==
 +
===2013 revenues===
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[[File:Indiana GF revenues 2013.png|right|400px|thumb|Breakdown of general fund revenue sources in FY 2013.<small><br>'''Source:''' [http://www.nasbo.org/ National Association of State Budget Officers]</small>]]
 +
The table below breaks down general fund revenues by source in fiscal year 2013 (comparable figures from surrounding states are also provided to give additional context).<ref name=expenditures2013>[http://www.nasbo.org/sites/default/files/State%20Expenditure%20Report.pdf ''National Association of State Budget Officers'' "State Expenditure Report, 2011-2013," accessed February 21, 2014]</ref> Figures for all columns except "Per capita revenue" are rendered in millions of dollars (for example, $2,448 translates to $2,448,000,000). Figures in the column labeled "Per capita revenue" have not been abbreviated.  
  
===FY2012 Surplus===
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{| class="wikitable" style="text-align:center; width:55%;"
 +
! colspan="8" align="center" style="background-color:#008000; color: white;" | Revenue sources in the general fund, FY 2013 ($ in millions)<ref name=expenditures2013/>
 +
|-
 +
! valign="bottom" style="background-color:#444; color: white;" | State
 +
! valign="bottom" style="background-color:#444; color: white;" | Sales tax
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! valign="bottom" style="background-color:#444; color: white;" | Personal income tax
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! valign="bottom" style="background-color:#444; color: white;" | Corporate income tax
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! valign="bottom" style="background-color:#444; color: white;" | Gaming tax
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! valign="bottom" style="background-color:#444; color: white;" | Other taxes and fees
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! valign="bottom" style="background-color:#444; color: white;" | Total
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! valign="bottom" style="background-color:#444; color: white;" | Per capita revenue**
 +
|-
 +
|'''Indiana''' || '''$6,796''' || '''$4,978''' || '''$968''' || '''$555''' || '''$1,165''' || '''$14,462''' || '''$2,200.92'''
 +
|-
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|[[Illinois state budget|Illinois]] || $7,335 || $16,630 || $3,086 || $340 || $8,899 || $36,290 || $2,817.08
 +
|-
 +
|[[Michigan state budget|Michigan]] || $1,832 || $5,844 || $438 || $0 || $1,075 || $9,189 || $928.59
 +
|-
 +
|[[Ohio state budget|Ohio]] || $8,445 || $9,508 || $262 || $0 || $11,344 || $29,559 || $2,554.62
 +
|-
 +
|[[Wisconsin state budget|Wisconsin]] || $4,410 || $7,497 || $925 || $0 || $1,254 || $14,086 || $2,554.62
 +
|-
 +
| align="left" colspan="8" | <small>Per capita figures are calculated by taking the state's total revenues and dividing by the number of state residents according to United States Census estimates for 2013.<ref name=2013census>[http://factfinder2.census.gov/faces/tableservices/jsf/pages/productview.xhtml?src=bkmk ''United States Census Bureau'' "Annual Estimates of the Resident Population: April 1, 2010 to July 1, 2013," accessed February 26, 2014]</ref><br>'''Source:''' [http://www.nasbo.org/ National Association of State Budget Officers]</small>
 +
|}
  
The state ended FY2012 with a reserve balance totaling $2.15 billion, an amount equal to 15.9% of expenditures. The state received  $383 million, or 2.8 percent, more revenue than it anticipated in FY2012, and it spent $275 million) less than was anticipated in the budget that was passed in April 2011.<Ref name=auditor>[http://www.in.gov/auditor/files/FY2012_year_end_close.pdf Release by Tim Berry, Indiana Auditor of State "Indiana State Government Reports $2.15 Billion Reserve Balance" July 12, 2012]</ref>
+
===Revenue trends===
 +
The table below details the change in revenue sources in the general fund from 2009 to 2013.<ref name=expenditures2013/><ref name=expenditures2011/> Figures for all columns except "Per capita revenue" are rendered in millions of dollars (for example, $2,448 translates to $2,448,000,000). Figures in the column labeled "Per capita revenue" have not been abbreviated.
  
The surplus money will flow back to the state, with $360 million used to further strengthen INPRS Pensions and another $360 million will go toward the Automatic Taxpayer Refund,<Ref name=auditor/> meaning that each taxpayer will get more than $100 next year.<ref>[http://www.indystar.com/article/20120729/NEWS05/207300305/Even-hefty-surplus-budget-questions-loom-Indiana The Indianapolis Star "Even with hefty surplus, budget questions loom for Indiana" July 29, 2012]</ref>
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{| class="wikitable" style="text-align:center; width:65%;"
 
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! colspan="8" align="center" style="background-color:#008000; color: white;" | Revenue sources in the general fund, Indiana ($ in millions)<ref name=expenditures2013/><ref name=expenditures2011>[http://www.nasbo.org/sites/default/files/2010%20State%20Expenditure%20Report_0.pdf ''National Association of State Budget Officers'' "State Expenditure Report, 2009-2011," accessed February 24, 2014]</ref>
A report released on Aug. 3, 2011, by the [http://www.in.gov/sba/ State Budget Agency] showed that the state had received $23 million more in tax revenues coming in than expected for the first month of FY2012, which is 2.3 percent more than was projected in an April forecast that legislators used when drafting the state budget.<ref>[http://www.businessweek.com/ap/financialnews/D9OSNRCO0.htm Businessweek "Indiana tax revenues better than expected for July" Aug. 3, 2011]</reF>
+
|-
 
+
! valign="bottom" style="background-color:#444; color: white;" | Year
===Budget as passed===
+
! valign="bottom" style="background-color:#444; color: white;" | Sales tax
On April 29, 2011, the Indiana state legislature approved a two-year budget of $28.3 billion total.<ref name=pass>[http://www.courier-journal.com/article/20110429/NEWS02/304290079/Indiana-lawmakers-pass-two-year-state-budget?odyssey=nav|head The Louisville Courier Journal "Indiana lawmakers pass two-year state budget" April 29, 2011]</ref>  Before passage of the budget, the state faced a $1 billion gap between the state's revenue and expenses, including the need to build up reserves by $500 million.<ref name=insurance>[The Chicago Tribune "Ind. governor, lawmakers eyeing insurance fund" Dec. 29, 2010]</ref> Gov. Daniels signed the budget into law on May 10, 2011.<ref name=forbes>[http://www.forbes.com/feeds/ap/2011/05/11/business-in-daniels-legislation_8460949.html Forbes "Ind. gov signs 80 bills into law, including budget" May 11, 2011]</ref>
+
! valign="bottom" style="background-color:#444; color: white;" | Personal income tax
 
+
! valign="bottom" style="background-color:#444; color: white;" | Corporate income tax
The budget freezes spending on universities and most state agencies and maintains current Medicaid and horse racing programs.<ref name=pass/>  It increases school funding over the biennium by approximately about $150 million, boosting spending by 0.5% in 2012 and 1% in 2013.<ref name=pass/> The budget increases funding in key areas such as K-12 education, student financial aid, Medicaid and pensions, while reducing General Fund appropriations for most executive branch agencies by 15 percent compared to FY 2011 appropriations.  The budget increases funding in key areas such as K-12 education, student financial aid, Medicaid and pensions, while reducing General Fund appropriations for most executive branch agencies by 15% compared to FY 2011 appropriations.<ref name=list>[http://www.in.gov/sba/files/ap_2011_all.pdf List of Appropriations]</ref>  The Appropriations in the FY2012 state budget can be found [http://www.in.gov/sba/files/ap_2011_all.pdf here].  The state spends more than half of its budget on education.<Ref>[http://www.boston.com/business/taxes/articles/2012/01/19/ind_senators_consider_changing_tax_refund/ The Boston Globe "Ind. senators consider changing tax refund" Jan. 19, 2012]</ref>
+
! valign="bottom" style="background-color:#444; color: white;" | Gaming tax
 
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! valign="bottom" style="background-color:#444; color: white;" | Other taxes and fees
The budget include a taxpayer refund provision that, if state reserves exceed 10 percent of budgeted spending, half the extra money will go to pension funds and the other half will be returned to taxpayers.  The budget spends less than it takes in and should all go according to the plan, the state will end the biennium with $1 billion in reserves.<ref name=forbes/>
+
! valign="bottom" style="background-color:#444; color: white;" | Total
 
+
! valign="bottom" style="background-color:#444; color: white;" | Per capita revenue**
Lawmakers designated $6.26 billion for FY 2012 and $6.31 billion for FY 2013 for K-12 tuition support from the General Fund. On a calendar year basis, K-12 tuition support was increased 0.5% for 2012 and 1.0% for 2013.<ref name=list/>
+
|-
 
+
|2013 || $6,796 || $4,978 || $968 || $555 || $1,165 || $14,462 || $2,200.92
The [http://www.in.gov/sba/2370.htm Indiana State Budget Committee] held hearings in November and December 2010.<ref name=annual>[http://www.businessweek.com/ap/financialnews/D9JEMN181.htm Businessweek "Annual Indiana budget hearings to begin Wednesday" Nov. 12, 2010]</ref> Committee Chair State Sen. [[Luke Kenley|Luke Kenley]] estimated that lawmakers will need to reduce current spending approximately $1 billion to avoid a tax increase.<ref name=annual/>
+
|-
 
+
|2012 || $6,622 || $4,766 || $959 || $614 || $1,164 || $14,125 || $2,160.52
State Budget Director Adam Horst said the state is spending about $13.9 billion per year in FY2011, and revenues in FY2012 will reach only $13.4 billion even with the projected growth.<Ref name=medicaid>[http://www.bloomberg.com/news/2010-12-16/ind-may-cut-medicaid-services-to-check-costs.html Bloomberg "Ind. may cut Medicaid services to check costs" Dec. 15, 2010]</ref> 
+
|-
Revenue forecasts released mid-Dec. 2010 anticipated that the state will take in $13.4 billion in fiscal year 2012 and $13.9 billion in 2013.<Ref name=hope/> Those are increases over current revenues, but current spending is about $13.9 billion, meaning that if spending stays the same, Indiana will likely spend about $500 million more in the first year of the budget than it generates.<ref name=hope/>
+
|2011 || $6,218 || $4,586 || $705 || $660 || $1,106 || $13,275 || $2,037.19
 
+
The Indiana Fiscal Policy Institute, a nonpartisan government research group, estimated that the state's deficit for FY2012 could hit $1.3 billion if the economy does not drastically improve or if deeper spending cuts are not made.<ref name=trouble>[http://www.businessweek.com/ap/financialnews/D9I51UHO0.htm Businessweek "Report: Ind. government finances in big trouble" Sept. 10, 2010]</ref>  The deficit is due in large part to increased teacher, police and firefighter pension payments as well as statutory increases in Medicaid.<ref name=where>[http://www.jconline.com/article/20101003/ELECTION01/10030362/Where-would-Statehouse-candidates-cut-state-budget- The Journal and Courier "Where would Statehouse candidates cut state budget?" Oct. 3, 2010]</ref>
+
 
+
'''Education spending'''
+
 
+
For FY2012, Indiana devoted 32.3% of its total spending to K-12 education, down from 34.0% in FY2009.<ref>[http://www.statebudgetsolutions.org/publications/detail/throwing-money-at-education-isnt-working State Budget Solutions "Throwing Money At Education Isn't Working" Sept. 12, 2012]</ref>
+
 
+
{|class="wikitable"
+
!Fiscal Year
+
!Total Spending<ref>[http://www.usgovernmentspending.com/spending_chart_1997_2017AKb_13s1li111mcn_F0t USGovernmentSpending.com "Indiana Government Spending Chart - Total Spending" Aug. 4, 2012]</ref>
+
!Education Spending<reF>[http://www.usgovernmentspending.com/spending_chart_1997_2017ALb_13s1li111mcn_20t http://www.usgovernmentspending.com/spending_chart_1997_2017ALb_13s1li111mcn_20t USGovernmentSpending.com "Indiana Government Spending Chart - Education Spending"Aug. 4, 2012]</ref>
+
! Percent Education Spending
+
 
|-
 
|-
|2009|| $51.2 billion ||$17.0 billion || 33.2%
+
|2010 || $5,915 || $3,876 || $592 || $659 || $1,145 || $12,187 || $1,877.82
 
|-
 
|-
|2010||$51.7 billion||$17.2 billion||33.2%
+
|2009 || $6,153 || $4,314 || $839 || $608 || $1,021 || $12,935 || $2,013.82
 
|-
 
|-
|2011|| $52.3 billion||$17.6 billion||33.6%
+
|style="background-color:black; color:white"|'''Change in %'''
 +
| style="background-color:black; color:white" align="center"|'''10.45%''' || align="center" style="background-color:black; color:white"|'''15.39%'''|| align="center" style="background-color:black; color:white"| '''15.38%''' || align="center" style="background-color:black; color:white"|'''-8.72%''' ||align="center" style="background-color:black; color:white"| '''14.10%''' || align="center" style="background-color:black; color:white"|'''11.81%''' || align="center" style="background-color:black; color:white"|'''9.29%'''
 
|-
 
|-
|2012|| $18.4 billion||$25.3 billion||33.8%
+
|align="left" colspan="8" | <small>Per capita figures are calculated by taking the state's total revenues and dividing by the number of state residents according to United States Census estimates.<ref name=2013census/><ref name=2009census>[https://www.census.gov/popest/data/historical/2000s/vintage_2009/index.html ''United States Census Bureau'' "Vintage 2009: Annual Population Estimates," accessed February 26, 2014]</ref><br>'''Source:''' [http://www.nasbo.org/ National Association of State Budget Officers]</small>
 
|}
 
|}
  
===Legislative Budget Proposal===
+
==State budgets by year==
 +
===Fiscal year 2014===
 +
{{Budget bill box
 +
|State = Indiana
 +
|Year = 2014
 +
|Link = http://www.in.gov/sba/2611.htm HEA 1001
 +
|Introduced = January 15, 2013
 +
|Days =
 +
|State House = February 25, 2013
 +
|Vote lower house = 68-28
 +
|State Senate = April 9, 2013
 +
|Vote upper house = 38-12
 +
|Conference = April 27, 2013
 +
|Conference upper house vote = 70-30
 +
|Conference lower house vote = 39-11
 +
|Governor = [[Mike Pence]]
 +
|Signed = May 8, 2013
 +
|Vetoed =  
 +
}}
  
Indiana lawmakers reached an agreement on a state budget on April 28, 2011, and planned to vote April 29, 2011, on a two-year, $28 billion state budget before the end of the session. The compromise includes no tax increases but also avoids large cuts to most programs. It increases K-12 education funding by 0.5 percent in 2012 and 1 percent in 2013. Pensions and Medicaid would also see increased funding. If current revenue forecasts hold up, a $1 billion surplus would remain at the end of the biennium.<ref>[http://www.courierpress.com/news/2011/apr/28/no-headline---29a0xstatehouse/ The Courier Press "Indiana lawmakers reach consensus on state budget" April 28, 2011]</ref>  
+
On January 15, 2013, [[Indiana Governor|Governor]] [[Mike Pence]] introduced his proposed $29 billion biennial state budget.<ref name=submits>[http://www.southbendtribune.com/news/sbt-pence-submits-lean-state-budget-with-new-tax-cut-20130116,0,21248.story ''The South Bend Tribune'' "Pence submits lean state budget with new tax cut," January 16, 2013]</ref> The proposal included $14.4 billion in spending in fiscal year 2014 and $14.6 billion in spending in fiscal year 2015.<Ref name=raises>[http://www.indystar.com/article/20130115/NEWS05/301160307/Pence-wants-more-spending-education-Medicaid-transportation ''The Indianapolis Star'' "Indiana Gov. Mike Pence budget raises education, Medicaid, transportation spending," January 15, 2013]</ref> It increased state funding by about $200 million in each year of the biennium, or roughly 1.4 percent per year.<ref name=submits/>
  
The Senate Appropriations Committee approved on April 18, 2011, a $28 billion budget that would end the biennium with more than $1 billion in reserves, more than both the House version and the version proposed by Gov. Daniels.  Under the Senate plan, schools would receive an additional $150 million in the budget cycle. The budget proposal also uses a performance-based formula to divide some higher education money among colleges meeting goals, ends a tuition freeze at state colleges, gives extra money to all school districts with at least 500 students as an incentive for smaller districts to consolidate, and freezes lawmakers' pay for two years.  The proposal also includes creation of a committee to study the labor issues surrounding the five-week boycott from House Democrats earlier this session, including a right-to-work bill that would prohibit union membership from being a condition of employment.<reF>[http://www.businessweek.com/ap/financialnews/D9MMBGQG0.htm Businessweek "Senate panel OKs new budget with more school money" April 18, 2011]</ref>
+
On May 8, 2013, Pence signed a $30 billion budget into law. Passed by the Republican-controlled [[Indiana General Assembly|state legislature]], the budget increased elementary and secondary education funding by 2 percent in 2014 and 1 percent more in 2015. The enacted budget also included a personal income tax cut (from 3.4 percent to 3.3 percent), a corporate income tax cut, and eliminated the inheritance tax.<ref>[http://www.nwitimes.com/news/local/govt-and-politics/pence-signs-two-year-indiana-budget/article_5ef8966c-108d-53c1-a85c-46d5605c96d6.html ''The Times of Northwest Indiana'' "Pence signs two-year Indiana budget," May 8, 2014]</ref>
  
On March 30, 2011, the [[Indiana House of Representatives|Indiana House]] approved a $28 billion, two year state budget plan that would maintain overall education funding level from FY2011 while shifting more money to growing suburban school districts.  It now goes to the Senate for consideration.  The budget has no tax increases. Nearly half of the state spending would go toward K-12 education, but it differs from the governor's proposal in that it does not restore school funding of about $450 million ordered by Gov. Mitch Daniels.  It also rejects the governor's call for a 3% increase in funding for colleges and universities, instead maintaining the same funding amount from FY2011.<ref>[http://www.businessweek.com/ap/financialnews/D9M9UVE80.htm Businessweek "Indiana House backs GOP state budget plan" March 31, 2011]</ref>
+
===Fiscal year 2013===
 +
The fiscal year 2012 and 2013 state budget as enacted can be accessed [http://www.in.gov/sba/2572.htm here]
  
===Right to Work and Legislative Walk Out===
+
===Fiscal year 2012===
On Feb. 22, 2011, amid a protest by 4,000 against [http://www.in.gov/apps/lsa/session/billwatch/billinfo?year=2011&session=1&request=getBill&doctype=HB&docno=1216 House Bill 1216] that would limit collective bargaining, Democrats in the [[Indiana House of Representatives|Indiana House of Representatives]] did not show up, and instead followed the example of [[Wisconsin]] Senate Democrats and fled to [[Illinois]].<ref name=npr>[http://www.npr.org/blogs/itsallpolitics/2011/02/23/133992321/state-budget-fights-wednesday-feb-23rd-edition NPR "State Budget Fights - Wednesday, Feb. 23rd Edition" Feb. 23, 2011]</ref> 
+
::''See also: [[Indiana state budget (2011-2012)]]
  
The walk out by Democrats prevents action on the bill because a two-thirds majority needed for a quorum;  Republicans hold 60 of the 100 seats in the House.  Without the Democrats present, the House could not have a quorum.<ref name=block/> On March 3, 2011, Republican House members moved Thursday to fine missing Democrats $250 a day beginning on March 7, 2011, and increased that figure to $350 per day on March 21, 2011.<ref name=return/>  On March 29, 2011, Republicans proposed some final changes to a bill that affects labor union jobs and wages, and the Democrats then returned to Indiana.<ref name=return>[http://www.usatoday.com/news/nation/2011-03-29-indiana-democrats-return_N.htm USAToday.com "Indiana Democrats return, now back to work" March 29, 2011]</ref>  The legislative session ends April 29, 2011.<ref name=return/>  Democrats will have to pay more than $100,000 in fines, which will go into the House's budget.<ref name=return/>
+
===Fiscal year 2011===
 +
::''See also: [[Indiana state budget (2010-2011)]]
  
The Democrats' absence prevented the House from voting on [http://www.in.gov/legislative/bills/2011/IN/IN1468.1.html House Bill 1468], the so-called Right to Work bill that would give members of private-sector unions the right to opt out of unions and not pay dues.<Ref name=block>[http://online.wsj.com/article/SB10001424052748703529004576160240828766056.html The Wall Street Journal "Indiana Democrats Block Action on Union Bill" Feb. 22, 2011]</ref> 
+
===Fiscal year 2010===
 +
::''See also: [[Indiana state budget (2009-2010)]]
  
In Indiana, all employees covered by a contract must belong to the union if a union bargains for a group of employees at a workplace.<ref>[http://online.wsj.com/article/SB10001424052748703800204576158851079665840.html?mod=WSJ_hp_LEFTTopStories The Wall Street Journal "Political Fight Over Unions Escalates" Feb. 22, 2011]</ref>   The bill would have barred unions and companies from negotiating a contract that requires non-union members to pay fees.<ref name=exodus>[http://www.indystar.com/article/20110222/NEWS/110222004/1003/BUSINESS/Daniels-Not-time-right-work-bill?odyssey=nav|head Indianapolis Star "Exodus: Dems trigger Statehouse showdown" Feb. 22, 2011]</ref>  The right-to-work bill died when it failed to clear the required legislative procedural hurdles.<Ref name=npr/> Republicans could attempt to reintroduce right-to-work and other bills by inserting the proposals into other bills later in the session, but risk triggering another stalemate.<Ref name=npr/> Gov. Daniels said at the end of 2010 that while he agrees philosophically with the legislation, lawmakers should not pursue it.<ref name=exodus/>  Daniels said it was a big issue that needed a state-wide debate and noted no Republican had run on this in the November election.<ref name=npr/>
+
==Historical spending==
 +
State budget historical spending below was compiled by the National Association for State Budget Officers. Figures reflect the reported "Total Expenditures" in Table 1. Figures for all columns are rendered in millions of dollars (for example, $2,448 translates to $2,448,000,000).<ref name=expenditures2013/><ref name=expenditures2012/>
 +
{{State budget historical spending
 +
|State=South Carolina
 +
|totalbudgets= 3
 +
|2011-2012genfund=13579
 +
|2011-2012otherfund= 3454
 +
|2011-2012fedfund= 9272
 +
|2011-2012bonds= 0
 +
|2011-2012budgettotal= 26305
 +
|2010-2011genfund= 13037
 +
|2010-2011otherfund= 3348
 +
|2010-2011fedfund= 9952
 +
|2010-2011bonds= 100
 +
|2010-2011budgettotal= 26437
 +
|2009-2010genfund= 12915
 +
|2009-2010otherfund= 3239
 +
|2009-2010fedfund= 10333
 +
|2009-2010bonds= 169
 +
|2009-2010budgettotal= 26656
 +
}}
  
Despite killing the bill that would have prohibited union membership from being a condition of employment, Indiana Democrats did not return to their home state. They remain in Illinois in an attempt to thwart other parts of Republican Gov. Mitch Daniels' agenda, including restrictions on teacher collective bargaining.<ref>[MSNBC.com "Wis. stalemate: Deal struck, cops sent to Dem homes" Feb. 24, 2011]</ref>  The state Senate passed a bill that will narrow the scope of public school teachers' collective bargaining right, but the measure cannot take effect until it is voted on by the House, and that will not happen until lawmakers return.<ref>[http://www.reuters.com/article/2011/02/25/us-states-unions-idUSTRE71O7C920110225 Reuters "Several U.S. states consider union limits" Feb. 25, 2011]</ref> In the fourth week of their absence, the Democrats said that they want changes to bills that use tax dollars to fund private school tuition and which impact collective bargaining for labor unions, but Republicans said they will not negotiate any changes.  Indiana requires a quorum of lawmakers present to pass all legislation.<ref>[http://www.indystar.com/article/20110314/NEWS05/110314022/Indiana-House-Democrats-begin-their-4th-week-walkout?odyssey=tab|topnews|text|IndyStar.com The Indianapolis Star "Indiana House Democrats begin their 4th week of walkout" March 14, 2011]</ref>
+
==State debt==
 +
According to a January 2014 report by the nonprofit organization State Budget Solutions, Indiana had a state debt of over $XX billion. Its state debt per capita was $XXX. The report revealed that state governments faced a combined $5.1 trillion in debt, 33 percent of annual gross state product. The obligation amounts to $16,178 per capita in the nation. A bulk of the state debt -- 79 percent -- was linked to unfunded [[public pensions]].<ref>[http://www.statebudgetsolutions.org/publications/detail/state-budget-solutions-fourth-annual-state-debt-report ''State Budget Solutions'' "State Budget Solutions' Fourth Annual State Debt Report," January 8, 2014]</ref><ref>[http://washingtonexaminer.com/exography-unfunded-public-employee-pensions-are-driving-state-debts-skyward/article/2542548 ''Washington Examiner'' "EXography: Unfunded public employee pensions drive state debts skyward," January 21, 2014]</ref>
 +
{{State debt box
 +
|State = Indiana
 +
|totaldebt=$46,377,635,000
 +
|totaldebtrank=29
 +
|percapdebt=$7,094
 +
|percapdebtrank=48
 +
|expenditures = $17,033,000,000
 +
|expendituresrank = 41
 +
}}
  
===Governor's Proposed Budget===
+
===Public pensions===
Horst presented Governor Daniels' budget to the State Budget Committee on Jan. 13, 2011.  The budget proposal calls for spending $13.76 billion in FY2012, and about $13.98 billion in FY2013.  At the end of the biennium, the state will have a surplus of about $725 million, bolstered in part by shifting $200 million in unused accrued interest from the state’s Public Deposit Insurance Fund that has languished since the 1930s.<ref name=presents>[http://www.indystar.com/article/20110113/NEWS05/110113015/1001/sports/Daniels-presents-state-budget-cuts-target-higher-ed-Medicaid?odyssey=nav|head The Indianapolis Star "Daniels presents state budget; cuts target higher ed, Medicaid" Jan. 13, 2011]</ref>
+
::''See also: [[Indiana public pensions]] and [[Indiana public employee salaries]]''
  
====Education====
+
The funding ratio for the state's pension system decreased from 70.29 percent in fiscal year 2007 to 60.80 percent in fiscal year 2012, a 9.49 percent drop. Likewise, unfunded liabilities increased from over $10 billion in fiscal year 2007 to more than $16 billion in fiscal year 2012.<ref name=INPRSCAFR>[http://www.in.gov/inprs/files/INPRSCAFR2012.pdf ''Indiana Public Retirement System'' "Comprehensive Annual Financial Report for the Fiscal year Ended June 30, 2012," accessed November 8, 2013]</ref>
Under the proposed budget, K-12 education funding will remain the same.<ref name=presents/>  The funding was not cut in part because of the cuts made in the prior two years, with schools having lost $300 million in state aid since the prior budget was enacted in 2009.<ref name=hope>[http://www.bloomberg.com/news/2010-12-17/indiana-schools-hope-to-avoid-cuts-in-next-budget.html Bloomberg "Indiana schools hope to avoid cuts in next budget" Dec. 17, 2010]</ref>
+
+
Senate Minority Leader [[Vi Simpson|Vi Simpson]] said schools face mounting health insurance and utility prices, coupled with inflation and other demands and thus need about a 2 percent increase in funding to handle rising cost<ref name=hope/>
+
  
The governor's proposed budget cuts higher education funding by approximately 9%.<ref name=presents/>
+
A 2012 report from the Pew Center on the States noted that Indiana's pension system was funded at 65 percent at the close of fiscal year 2010, well below the 80 precent funding level experts recommend. Consequently, Pew designated the state's pension system as cause for "serious concern."<ref name=indianapew>[http://www.pewstates.org/research/state-fact-sheets/widening-gap-update-indiana-85899399307 ''Pew Center on the States'' "Widening Gap Update: Indiana," June 18, 2012]</ref>
  
====Medicaid====
+
===Credit ratings===
The governor's proposed budget increases overall Medicaid funding, but eliminates some optional Medicaid services such as dental care, hearing aids, podiatry services and chiropractic services.<ref name=presents/>
+
States sometimes sell general obligation bonds to investors in order to finance large-scale undertakings (e.g., road construction and other public works projects). Credit rating agencies, such as Standard and Poor's, assign grades to states, evaluating their ability to pay the principal and interest on such bonds. Standard and Poor's grades range from AAA, the highest available, to BBB, the lowest. Generally speaking, a higher credit ranking indicates lower risk for an investor, which in turn lowers costs for taxpayers.<ref name=credit>[http://www.pewstates.org/projects/stateline/headlines/infographic-sp-state-credit-ratings-20012012-85899404785 ''Stateline: The Daily News Service of The Pew Charitable Trusts'' "Infographic: S&P State Credit Ratings, 2001-2012," July 13, 2012]</ref>
  
The state Medicaid actuary projected Indiana's share of the program's costs will rise by about 25% in FY2011-12, which is $1.46 billion and $1.84 billion respectively, and by nearly 9%, or $2.00 billion, in FY2013 should services remain the same.<Ref name=medicaid/>  [[Luke Kenley|Sen. Luke Kenley]]  said the General Assembly likely will cut some optional Medicaid services rather than resort to raising taxes.<Ref name=medicaid/>
+
The table below lists the Standard and Poor's credit ranking for Indiana from 2001 to 2012 (grades from surrounding states are provided for additional context).<ref name=credit/>
  
====Corrections====
+
{| class="wikitable" style="text-align:center; width:55%;"
 +
! colspan="6" align="center" style="background-color:#008000; color: white;" | S&P credit ratings from 2001 to 2012
 +
|-
 +
! valign="bottom" style="background-color:#444; color: white;" |
 +
! valign="bottom" style="background-color:#444; color: white;" | '''Indiana'''
 +
! valign="bottom" style="background-color:#444; color: white;" | Illinois
 +
! valign="bottom" style="background-color:#444; color: white;" | Michigan
 +
! valign="bottom" style="background-color:#444; color: white;" | Ohio
 +
! valign="bottom" style="background-color:#444; color: white;" | Wisconsin
 +
|-
 +
| 2012 || AAA || A+ || AA- || AA+ || AA
 +
|-
 +
| 2011 || AAA || A+ || AA- || AA+ || AA
 +
|-
 +
| 2010 || AAA || A+ || AA- || AA+ || AA
 +
|-
 +
| 2009 || AAA || A+ || AA- || AA+ || AA
 +
|-
 +
| 2008 || AAA || AA || AA- || AA+ || AA
 +
|-
 +
| 2007 || AA+ || AA || AA- || AA+ || AA-
 +
|-
 +
| 2006 || AA+ || AA || AA || AA+ || AA-
 +
|-
 +
| 2005 || AA || AA || AA || AA+ || AA-
 +
|-
 +
| 2004 || AA || AA || AA+ || AA+ || AA-
 +
|-
 +
| 2003 || AA+ || AA || AA+ || AA+ || AA-
 +
|-
 +
| 2002 || AA+ || AA || AAA || AA+ || AA-
 +
|-
 +
| 2001 || AA+ || AA || AAA || AA+ || AA
 +
|-
 +
|}
  
The Department of Corrections requested a $667.4 million budget for FY2012, which is an increase of 1.3% from what the department spent in FY2011, but less than it requested for in the previous budget cycle, due to spending cuts ordered by Gov. Mitch Daniels.<ref name=prison/> Rep. [[Peggy Welch|Peggy Welch]], a member of the State Budget Committee and the budget-writing [[Ways and Means Committee, Indiana House of Representatives|House Ways and Means Committee]], told a hearing that prisons are "going to be a big issue in the 2011 session." <Ref name=prison>[http://www.businessweek.com/ap/financialnews/D9JQN3UG0.htm Businessweek "Ind. lawmakers face choices to rein in prison cost" Nov. 30, 2010]</ref>
+
==Federal aid to state budget==
 +
::''See also: [[Federal aid to budgets in the 50 states]]''
 +
The chart below notes how much of the state’s general revenues come from the federal government. Figures were calculated by dividing each state’s federal intergovernmental revenue into its general revenue. The number in the rightmost column indicates the state's ranking in relation to the rest of the nation (e.g., if "1", the state receives the highest percentage of federal funding in the nation). Figures from neighboring states are included to provide additional context.<ref name=federalaid>[http://factfinder2.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=COG_2012_FIN009&prodType=table ''United States Census Bureau'' "State Government Finances: 2012," accessed February 24, 2014]</ref>
  
====Insurance Fund====
+
State governments receive aid from the federal government to fund a variety of joint programs, such as Medicaid. Federal aid varies considerably from state to state. For example, [[Mississippi state budget#Federal aid to state budget|Mississippi]] received approximately $7.7 billion in federal aid in 2012, which accounted for more than 45 percent of the state's general revenues. By contrast, [[Alaska state budget#Federal aid to state budget|Alaska]] received roughly $2.9 billion in federal aid in 2012, just under 20 percent of the state's general revenues.<ref name=federalaid/>
  
Indiana's public deposit insurance fund (PDIF) was created after during the 1930s to replenish money invested by schools, cities and other public entities if a bank holding those funds failed and the Federal Deposit Insurance Corp. didn't cover the full losses.<ref name=insurance>[The Chicago Tribune "Ind. governor, lawmakers eyeing insurance fund" Dec. 29, 2010]</ref> Because new state regulations provide another form of backup insurance, the governor state that using the PDIF as a source of revenue to fund other state expenses is "a perfectly appropriate suggestion."<ref name=insurance/>
+
{| class="wikitable" style="text-align:center; width:50%;"
 +
! colspan="4" align="center" style="background-color:#008000; color: white;" | Federal aid to state budgets in 2012
 +
|-
 +
! valign="bottom" style="background-color:#444; color: white;" | State
 +
! valign="bottom" style="background-color:#444; color: white;" | Federal aid as % of general revenue
 +
! valign="bottom" style="background-color:#444; color: white;" | Total federal aid ($ in millions)
 +
! valign="bottom" style="background-color:#444; color: white;" | National rank
 +
|-
 +
| '''Indiana''' || '''32.96%''' || '''$10,441''' || '''27'''
 +
|-
 +
| [[Illinois state budget|Illinois]] || 25.66% || $15,647 || 43
 +
|-
 +
| [[Michigan state budget|Michigan]] || 33.74% || $17,850 || 24
 +
|-
 +
| [[Ohio state budget|Ohio]] || 34.88% || $20,688 || 17
 +
|-
 +
| [[Wisconsin state budget|Wisconsin]] || 28.19% || $8,855 || 38
 +
|-
 +
|}
 +
 +
===Stimulus===
 +
Indiana has received $4.1 billion in federal stimulus funding between February 2009 and June 2013.<ref>[http://www.recovery.gov/Pages/default.aspx ''Recovery.gov'' "Stimulus Spending by State," accessed February 21, 2014]</ref>
  
 
==Budget transparency==
 
==Budget transparency==
 +
::''See also: [[Evaluation of Indiana state website]] and [[Constitutional provisions regarding reading of bills]]''
 +
 
Article 4, Section 18 of the Indiana State Constitution requires that the “title” of a bill be read on three days in each legislative chamber prior to a final vote on the bill.<ref>[http://www.in.gov/legislative/ic/code/const/art4.pdf Article 4, Section 18]</ref>  
 
Article 4, Section 18 of the Indiana State Constitution requires that the “title” of a bill be read on three days in each legislative chamber prior to a final vote on the bill.<ref>[http://www.in.gov/legislative/ic/code/const/art4.pdf Article 4, Section 18]</ref>  
  
Line 146: Line 342:
  
 
In March 2011, the state added agency performance reviews to the ITP and more reports on local government spending.<ref>[http://www.ibj.com/indana-state-budget-website-gets-new-features/PARAMS/article/25917 Indianapolis Business Journal "Indiana state budget website gets new features" March 14, 2011]</ref><ref>[http://www.in.gov/itp/2334.htm Indiana performance reviews]</ref>
 
In March 2011, the state added agency performance reviews to the ITP and more reports on local government spending.<ref>[http://www.ibj.com/indana-state-budget-website-gets-new-features/PARAMS/article/25917 Indianapolis Business Journal "Indiana state budget website gets new features" March 14, 2011]</ref><ref>[http://www.in.gov/itp/2334.htm Indiana performance reviews]</ref>
 
:''See also: [[Evaluation of Indiana state website]] and [[Constitutional provisions regarding reading of bills]]''
 
  
 
===Government tools===
 
===Government tools===
Line 176: Line 370:
  
 
In addition to the individual state profile, IGPA offers a 50-state comparison and profiles for other states.<ref>[http://igpa.uillinois.edu/system/files/50_States_Transparency_Profiles.pdf 50-state comparison]</ref><ref>[http://igpa.uillinois.edu/content/state-transparency-profiles State Profiles]</ref>
 
In addition to the individual state profile, IGPA offers a 50-state comparison and profiles for other states.<ref>[http://igpa.uillinois.edu/system/files/50_States_Transparency_Profiles.pdf 50-state comparison]</ref><ref>[http://igpa.uillinois.edu/content/state-transparency-profiles State Profiles]</ref>
 
==Budget background==
 
The [[Indiana General Assembly|Indiana General Assembly]] meets annually and has a biennial budget. The [[governor]] submits the budget to the legislature in accordance with IC 4-12-1-9(a): Before the second Monday of January, in the year immediately after preparation, the budget report and the budget bill shall be submitted to the Governor by the budget committee. The Governor shall deliver to the house members of the budget committee such bill or bills for introduction into the [[Indiana House of Representatives|House of Representatives]].<ref>[http://www.nasbo.org/LinkClick.aspx?fileticket=AaAKTnjgucg=&tabid=80 ''National Association of Budget Officers'', "Budget Processes in the States," 2008]</ref>
 
 
Indiana is required to pass a balanced budget by statue stating that "no law shall authorize any debt to be contracted", except for "casual deficits" which must be covered by loans "as may be necessary to meet the demands of the state."  Indiana law prohibits the state from carrying a deficit from one year to the next.  State law creates a spending cap under Section 4-10-21-2, but an exemption from the State spending cap for appropriation exists under Section 4-10-21-7.<ref name=watch>[http://indiana.statebudgetwatch.org/2009/12/29/indiana-budget-analysis/ Indiana Budget Analysis]</ref>
 
 
Indiana maintains seven major governmental funds: the General, Motor Vehicle Highway, Medicaid Assistance, Major Moves Construction, State Highway Department, Property Tax Replacement and Tobacco Settlement Funds. The State budgets all seven major funds in addition to more than fourteen other non-major funds.<Ref name=watch/>
 
 
===Budget figures===
 
 
[http://www.in.gov/sba/2543.htm The 2009-2011 state budget] passed June 30, 2009 by the Indiana General Assembly during the 2009 regular and special sessions provides:<ref>[http://www.in.gov/sba/2543.htm ''Indiana State Budget Agency'', “2009 - 2011 As-Passed Budget,” August 31, 2009]</ref>
 
 
Total Funds
 
*$26.2 billion FY 2009 (listed as a comparison)
 
*$26.9 billion FY 2010
 
*$26.9 billion FY 2011
 
 
General Funds
 
*$14.4 billion FY 2009 (listed as a comparison)
 
*$13.6 billion FY 2010
 
*$14.1 billion FY 2011
 
 
General Fund 2009-10<ref name=fiscalsurvey>[http://www.nga.org/Files/pdf/FSS1006.PDF National Governors Association and  National Association of State Budget Officers Fiscal Survey of States June 2010]</ref>
 
{|class=wikitable
 
!Category
 
!FY2009 Amount in millions Actual
 
!FY 2010 Amount in millions Estimated
 
|-
 
|Beginning Balance ||1,050||964 
 
|-
 
|Revenues ||13,063 ||12,191
 
|-
 
|Adjustments|| 0 ||0
 
|-
 
|Total Resources ||14,113||13,155
 
|-
 
|Expenditures ||13,019 ||12,836
 
|-
 
|Adjustments||130||0
 
|-
 
|Ending Balance||964||319
 
|-
 
|Budget Stabilization Fund||365||369
 
|}
 
 
 
'''Fiscal 2010 Tax Collections Compared With Projections Used in Adopting Fiscal 2010 Budgets (Millions)'''<ref name=fiscalsurvey/>
 
{|class=wikitable
 
!Category
 
!Amount
 
|-
 
|Sales Tax Original Estimate||6,132       
 
|-
 
|Sales Tax Current Estimate||5,932
 
|-
 
|Personal Income Tax Original Estimate||4,289
 
|-
 
|Personal Income Tax Current Estimate||3,776
 
|-
 
|Corporate Income Tax Estimate||800
 
|-
 
|Corporate Income Tax Estimate||547
 
|}
 
 
 
 
The following table provides a history of Indiana's expenditures and gross domestic product (GDP).
 
{| class="wikitable"
 
|-
 
! Fiscal Year
 
! Expenditures (billions)
 
! GDP (billions)
 
|-
 
|2000
 
|$31.2<ref name="Budget">[http://www.usgovernmentspending.com/Indiana_state_spending.html ''US Government Spending'',"Indiana State and Local spending," retrieved March 10,2009]</ref>
 
|$194.4<ref name="Budget"/>
 
|-
 
|2001
 
|$33.8<ref name="Budget"/>
 
|$195.2<ref name="Budget"/>
 
|-
 
|2002
 
|$36.3<ref name="Budget"/>
 
|$205.0<ref name="Budget"/>
 
|-
 
|2003
 
|$37.8<ref name="Budget"/>
 
|$215.4<ref name="Budget"/>
 
|-
 
|2004
 
|$39.3<ref name="Budget"/>
 
|$228.3<ref name="Budget"/>
 
|-
 
|2005
 
|$42.0<ref name="Budget"/>
 
|$232.8<ref name="Budget"/>
 
|-
 
|2006
 
|$44.0<ref name="Budget"/>
 
|$238.7<ref name="Budget"/>
 
|-
 
|2007
 
|$46.1<ref name="Budget"/>
 
|$246.4<ref name="Budget"/>
 
|-
 
|2008
 
|$48.2<ref name="Budget"/>
 
|$254.4<ref name="Budget"/>
 
|-
 
|2009
 
|$50.5*<ref name="Budget"/>
 
|$262.7*<ref name="Budget"/>
 
|-
 
|}
 
 
*NOTE: The figures for FY 2009 won't be finalized until the end of the fiscal year.
 
 
 
See [[Indiana state budget (2008-2009)]] for more details.
 
 
==2009-2010 budget crisis==
 
:: ''See also: [[State budget crisis, 2009-2010]]''
 
<div style="float:right">
 
{|class="wikitable" cellspacing="0" cellpadding="5" width="205"
 
|-
 
|{{#ev:youtube|aGGTiyTEriE|250}}<br><span style="font-size:80%">Gov. Mitch Daniels, 2010 State of the State Address</span>
 
|}
 
</div>
 
 
Indiana faced a budget shortfall of approximately $1.8 billion for FY 2010.
 
<ref name="BSUJan19">[http://www.huffingtonpost.com/2010/08/09/gov-daniels-criticizes-st_n_676166.html ''Huffington Post'', "Gov. Daniels Criticizes State Aid Package He Pushed Back in February", August 9, 2010]</ref> The fall in revenues has forced Daniels to make hundreds of millions of dollars in budget cuts, including: $150 million from higher education and $300 million from public schools. In the "2010 State of the State Address" Daniels emphasized the need to "streamline state government."<ref name="IndianaStateofState"/><ref>[http://mywabashvalley.com/content/fulltext/?cid=99391 ''MyWabashValley.com'',"Governor Optimistic Despite Budget Cuts," January 19, 2010]</ref>
 
 
Despite the state's looming deficit and failing revenues, Gov. Daniels said, "we will not make this recession worse by adding one cent to the tax burden of our fellow citizens." The [[Indiana General Assembly|General Assembly]] recently approved a [[Indiana Property Tax Cap Amendment (2010)|ballot measure]] for the [[Indiana 2010 ballot measures|statewide 2010 ballot]], widely supported by Gov. Daniels, which will let voters decide whether to amend limits on property tax bills into the state constitution.<ref name="IndianaStateofState"/>
 
 
Among the budget cuts announced by the governor in order to reduce the state's looming budget deficit were slaugherhouse inspections, however, on February 1 the governor reversed his decision. The planned cut included cutting the inspection budget by less than 50%.<ref>[http://abcnews.go.com/Business/wireStory?id=9722126 ''Associated Press'',"APNewsBreak: Daniels Backs Away From Planned Cuts," February 1, 2010]</ref><ref>[http://www.indianasnewscenter.com/news/local/83376602.html ''Indiana's NewsCenter'',"Governor Rethinking Some Budget Cuts," February 2, 2010]</ref>
 
  
 
==Accounting principles==
 
==Accounting principles==
Line 324: Line 383:
 
*Paying the State's employees
 
*Paying the State's employees
 
*Administrating Indiana’s Deferred Compensation Plan.
 
*Administrating Indiana’s Deferred Compensation Plan.
 
==Stimulus==
 
Indiana has received $4.1 billion in federal stimulus funding between February 2009 and June 2013.<ref>[http://www.recovery.gov/Pages/default.aspx ''Recovery'', "Stimulus Spending by State"]</ref>
 
 
==Public Employees==
 
:''See also [[Indiana public employee salaries]] and [[Indiana public pensions]]''
 
According to 2011 Census data, the state of Indiana and local governments in the state employed a total of 396,207 people.<ref name=census>[http://www2.census.gov/govs/apes/11stlin.txt 2011 Indiana Public Employment U.S. Census Data]</ref> Of those employees, 285,401 were full-time employees receiving a net pay of $1,080,098,963 per month and 110,806 were part-time employees paid $110,693,731 per month.<ref name=census/>  More than 62% of those employees, or 246,905 employees, were in education or higher education.<ref name=census/>
 
 
As of July 2010, the Indiana state government employed its smallest workforce since 1982.  Special committee approval must approve any new hires.<ref name=credit>[http://www.npr.org/templates/story/story.php?storyId=128691226 NPR.com "Credit Scares: Thriftier States Reduce Red Ink" July 22, 2010]</ref>
 
 
State employees' salaries were frozen in 2009 and through 2010.<ref name=credit/>
 
  
 
==See also==
 
==See also==

Revision as of 14:54, 13 March 2014

Indiana state budget

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Budget calendar:  
Current Governor:  Mike Pence
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Policypedia Budget Policy-logo-no background.png
This page contains information about budget processes and policy issues in Indiana, including:
  • A summary of the budget drafting process
  • Trends in revenues and expenditures
  • Current fiscal year budget developments
  • Financial transparency measures

Budget process

The state operates on a biennial budget cycle. The sequence of key events in the budget process is as follows:[1][2]

  1. In May of the year preceding the beginning of the new biennium, budget instructions and guidelines are sent to state agencies.
  2. In August, agencies submit their budget requests to the governor
  3. Hearings are held with state agencies from September to November.
  4. Public hearings on the budget are held from September to March.
  5. The governor submits his or her budget to the state legislature in February.
  6. The legislature typically adopts a budget in April, effective for the fiscal biennium beginning in July. A simple majority is required to pass a budget.

There are no constitutional or statutory provisions mandating that the governor must submit or the legislature must pass a balanced budget. Budget deficits may be carried over to the next biennium.[2]

The governor cannot exercise line item veto power over the budget passed by the legislature.[2]

Indiana maintains seven major governmental funds: the General, Motor Vehicle Highway, Medicaid Assistance, Major Moves Construction, State Highway Department, Property Tax Replacement and Tobacco Settlement Funds. The state budgets all seven major funds in addition to more than fourteen other non-major funds.[3]

Expenditures

Definitions

Although each state executes its budget process differently, the National Association of State Budget Officers (NASBO) breaks down state expenditures into four general categories. This allows for comparisons among the 50 states. NASBO's categories are as follows:[4]

  • General fund: "The predominant fund for financing a state’s operations. Revenues are received from broad-based state taxes. However, there are differences in how specific functions are financed from state to state."
  • Other funds: "Expenditures from revenue sources that are restricted by law for particular governmental functions or activities. For example, a gasoline tax dedicated to a highway trust fund would appear in the “Other funds” column. For Medicaid, other state funds include provider taxes, fees, donations, assessments, and local funds."
  • Federal funds: "Funds received directly from the federal government."
  • Bonds: "Expenditures from the sale of bonds, generally for capital projects."

2013 expenditures

Breakdown of expenditures in FY 2013.
Source: National Association of State Budget Officers

The table below breaks down expenditures for fiscal year 2013 (comparable figures from surrounding states are provided to give additional context).[4] Figures for all columns except "Per capita expenditures" are rendered in millions of dollars (for example, $2,448 translates to $2,448,000,000). Figures in the column labeled "Per capita expenditures" have not been abbreviated.

Total state expenditures, FY 2013 ($ in millions)[4]
State General fund Federal funds Other funds Bonds Total Per capita expenditures
Indiana $14,189 $10,357 $3,220 $0 $27,766 $4,225.60
Illinois $29,260 $15,407 $19,825 $1,955 $66,447 $5,158.07
Michigan $9,164 $19,295 $20,107 $182 $48,748 $4,926.22
Ohio $31,514 $12,630 $12,950 $1,174 $58,268 $5,035.78
Wisconsin $14,042 $10,815 $17,912 $0 $42,769 $7,447.53
Per capita figures are calculated by taking the state's total expenditures and dividing by the number of state residents according to United States Census estimates.[5][6]
Source: National Association of State Budget Officers

Expenditures by function

Breakdown of expenditures by function in FY 2012.
Source: National Association of State Budget Officers

State expenditures in Indiana can be further broken down by function (elementary and secondary education, public assistance, etc.). Fiscal year 2012 data is included in the table below (information from neighboring states is provided for additional context). Figures are rendered as percents, indicating the share of the total budget spent per category.

Expenditures by function, FY 2012 (as percents)[4]
State Elementary and secondary ed. Higher ed. Public assistance Medicaid Corrections Transportation Other
Indiana 32.9% 6.5% 1.5% 27.3% 2.9% 9.3% 19.7%
Illinois 15.8% 5.5% 0.1% 19.7% 2.2% 8.5% 48.1%
Michigan 27.2% 4.1% 0.9% 26.1% 4.7% 6.9% 30.2%
Ohio 20.6% 4.2% 1.5% 24.4% 3.1% 5.1% 41.2%
Wisconsin 16.7% 14.1% 0.4% 16.5% 2.9% 6.9% 42.5%
Source: National Association of State Budget Officers

Expenditure trends

Between 2008 and 2012, state expenditures for for elementary and second education rose by over nine percent. Likewise, Medicaid spending rose by more than five percent. Meanwhile, higher education fell by 1.4 percent during the same period. The table below details changes in expenditures from 2008 to 2012.[4][7][8][9][10] Fiscal year 2012 data is included in the table below. Figures are rendered as percents, indicating the share of the total budget spent per category.

Expenditures from 2008 to 2012 (as percents)
Year Elementary and secondary ed. Higher ed. Public assistance Medicaid Corrections Transportation Other
2012 32.9% 6.5% 1.5% 27.3% 2.9% 9.3% 19.7%
2011 32.2% 7.1% 1.4% 25.0% 2.9% 10.9% 20.4%
2010 32.4% 7.1% 1.4% 23.1% 2.9% 10.6% 22.4%
2009 28.1% 7.3% 1.3% 21.8% 2.9% 9.2% 29.4%
2008 23.5% 7.9% 1.4% 21.7% 3.0% 10.3% 32.2%
Change in % 9.4% -1.4% 0.1% 5.6% -0.1% -1% -12.5%
Source: National Association of State Budget Officers

Revenues

2013 revenues

Breakdown of general fund revenue sources in FY 2013.
Source: National Association of State Budget Officers

The table below breaks down general fund revenues by source in fiscal year 2013 (comparable figures from surrounding states are also provided to give additional context).[4] Figures for all columns except "Per capita revenue" are rendered in millions of dollars (for example, $2,448 translates to $2,448,000,000). Figures in the column labeled "Per capita revenue" have not been abbreviated.

Revenue sources in the general fund, FY 2013 ($ in millions)[4]
State Sales tax Personal income tax Corporate income tax Gaming tax Other taxes and fees Total Per capita revenue**
Indiana $6,796 $4,978 $968 $555 $1,165 $14,462 $2,200.92
Illinois $7,335 $16,630 $3,086 $340 $8,899 $36,290 $2,817.08
Michigan $1,832 $5,844 $438 $0 $1,075 $9,189 $928.59
Ohio $8,445 $9,508 $262 $0 $11,344 $29,559 $2,554.62
Wisconsin $4,410 $7,497 $925 $0 $1,254 $14,086 $2,554.62
Per capita figures are calculated by taking the state's total revenues and dividing by the number of state residents according to United States Census estimates for 2013.[5]
Source: National Association of State Budget Officers

Revenue trends

The table below details the change in revenue sources in the general fund from 2009 to 2013.[4][7] Figures for all columns except "Per capita revenue" are rendered in millions of dollars (for example, $2,448 translates to $2,448,000,000). Figures in the column labeled "Per capita revenue" have not been abbreviated.

Revenue sources in the general fund, Indiana ($ in millions)[4][7]
Year Sales tax Personal income tax Corporate income tax Gaming tax Other taxes and fees Total Per capita revenue**
2013 $6,796 $4,978 $968 $555 $1,165 $14,462 $2,200.92
2012 $6,622 $4,766 $959 $614 $1,164 $14,125 $2,160.52
2011 $6,218 $4,586 $705 $660 $1,106 $13,275 $2,037.19
2010 $5,915 $3,876 $592 $659 $1,145 $12,187 $1,877.82
2009 $6,153 $4,314 $839 $608 $1,021 $12,935 $2,013.82
Change in % 10.45% 15.39% 15.38% -8.72% 14.10% 11.81% 9.29%
Per capita figures are calculated by taking the state's total revenues and dividing by the number of state residents according to United States Census estimates.[5][6]
Source: National Association of State Budget Officers

State budgets by year

Fiscal year 2014

Indiana state budget -- 2014
Indiana State Legislature
Text:HEA 1001
Legislative History
Introduced:January 15, 2013
State House:February 25, 2013
Vote (lower house):68-28
State Senate:April 9, 2013
Vote (upper house):38-12
Conference:April 27, 2013
Conference Vote (upper house):70-30
Conference Vote (lower house):39-11
Governor:Mike Pence
Signed:May 8, 2013

On January 15, 2013, Governor Mike Pence introduced his proposed $29 billion biennial state budget.[11] The proposal included $14.4 billion in spending in fiscal year 2014 and $14.6 billion in spending in fiscal year 2015.[12] It increased state funding by about $200 million in each year of the biennium, or roughly 1.4 percent per year.[11]

On May 8, 2013, Pence signed a $30 billion budget into law. Passed by the Republican-controlled state legislature, the budget increased elementary and secondary education funding by 2 percent in 2014 and 1 percent more in 2015. The enacted budget also included a personal income tax cut (from 3.4 percent to 3.3 percent), a corporate income tax cut, and eliminated the inheritance tax.[13]

Fiscal year 2013

The fiscal year 2012 and 2013 state budget as enacted can be accessed here.

Fiscal year 2012

See also: Indiana state budget (2011-2012)

Fiscal year 2011

See also: Indiana state budget (2010-2011)

Fiscal year 2010

See also: Indiana state budget (2009-2010)

Historical spending

State budget historical spending below was compiled by the National Association for State Budget Officers. Figures reflect the reported "Total Expenditures" in Table 1. Figures for all columns are rendered in millions of dollars (for example, $2,448 translates to $2,448,000,000).[4][8]

Historical state budget spending in South Carolina ($ in millions)
Fiscal year General Fund Other funds Federal funds Bonds Budget totals
Total % of Budget Total % of Budget Total % of Budget Total % of Budget
2011-2012 $13,579 51.6% $3,454 13.1% $9,272 35.2% $0 0% $26,305
2010-2011 $13,037 49.3% $3,348 12.7% $9,952 37.6% $100 0.4% $26,437
2009-2010 $12,915 48.5% $3,239 12.2% $10,333 38.8% $169 0.6% $26,656
Averages: $13,177 50% $3,347 13% $9,852.33 37% $89.667 0% $26,466
General Fund: The predominant fund for financing a state’s operations. Revenues are received from broad-based state taxes. However, there are differences in how specific functions are financed from state to state.
Other funds: Expenditures from revenue sources that are restricted by law for particular governmental functions or activities. For example, a gasoline tax dedicated to a highway trust fund would appear in the “Other funds” column. For Medicaid, other state funds include provider taxes, fees, donations, assessments, and local funds.
Federal funds: Funds received directly from the federal government.
Bonds: Expenditures from the sale of bonds, generally for capital projects.

State debt

According to a January 2014 report by the nonprofit organization State Budget Solutions, Indiana had a state debt of over $XX billion. Its state debt per capita was $XXX. The report revealed that state governments faced a combined $5.1 trillion in debt, 33 percent of annual gross state product. The obligation amounts to $16,178 per capita in the nation. A bulk of the state debt -- 79 percent -- was linked to unfunded public pensions.[14][15]

Total state debt in Indiana[16]
Type Totals U.S. rank
Total state debt $46,377,635,000 29
Per capita debt $7,094 48
State and other fund expenditures $17,033,000,000 41

Public pensions

See also: Indiana public pensions and Indiana public employee salaries

The funding ratio for the state's pension system decreased from 70.29 percent in fiscal year 2007 to 60.80 percent in fiscal year 2012, a 9.49 percent drop. Likewise, unfunded liabilities increased from over $10 billion in fiscal year 2007 to more than $16 billion in fiscal year 2012.[17]

A 2012 report from the Pew Center on the States noted that Indiana's pension system was funded at 65 percent at the close of fiscal year 2010, well below the 80 precent funding level experts recommend. Consequently, Pew designated the state's pension system as cause for "serious concern."[18]

Credit ratings

States sometimes sell general obligation bonds to investors in order to finance large-scale undertakings (e.g., road construction and other public works projects). Credit rating agencies, such as Standard and Poor's, assign grades to states, evaluating their ability to pay the principal and interest on such bonds. Standard and Poor's grades range from AAA, the highest available, to BBB, the lowest. Generally speaking, a higher credit ranking indicates lower risk for an investor, which in turn lowers costs for taxpayers.[19]

The table below lists the Standard and Poor's credit ranking for Indiana from 2001 to 2012 (grades from surrounding states are provided for additional context).[19]

S&P credit ratings from 2001 to 2012
Indiana Illinois Michigan Ohio Wisconsin
2012 AAA A+ AA- AA+ AA
2011 AAA A+ AA- AA+ AA
2010 AAA A+ AA- AA+ AA
2009 AAA A+ AA- AA+ AA
2008 AAA AA AA- AA+ AA
2007 AA+ AA AA- AA+ AA-
2006 AA+ AA AA AA+ AA-
2005 AA AA AA AA+ AA-
2004 AA AA AA+ AA+ AA-
2003 AA+ AA AA+ AA+ AA-
2002 AA+ AA AAA AA+ AA-
2001 AA+ AA AAA AA+ AA

Federal aid to state budget

See also: Federal aid to budgets in the 50 states

The chart below notes how much of the state’s general revenues come from the federal government. Figures were calculated by dividing each state’s federal intergovernmental revenue into its general revenue. The number in the rightmost column indicates the state's ranking in relation to the rest of the nation (e.g., if "1", the state receives the highest percentage of federal funding in the nation). Figures from neighboring states are included to provide additional context.[20]

State governments receive aid from the federal government to fund a variety of joint programs, such as Medicaid. Federal aid varies considerably from state to state. For example, Mississippi received approximately $7.7 billion in federal aid in 2012, which accounted for more than 45 percent of the state's general revenues. By contrast, Alaska received roughly $2.9 billion in federal aid in 2012, just under 20 percent of the state's general revenues.[20]

Federal aid to state budgets in 2012
State Federal aid as % of general revenue Total federal aid ($ in millions) National rank
Indiana 32.96% $10,441 27
Illinois 25.66% $15,647 43
Michigan 33.74% $17,850 24
Ohio 34.88% $20,688 17
Wisconsin 28.19% $8,855 38

Stimulus

Indiana has received $4.1 billion in federal stimulus funding between February 2009 and June 2013.[21]

Budget transparency

See also: Evaluation of Indiana state website and Constitutional provisions regarding reading of bills

Article 4, Section 18 of the Indiana State Constitution requires that the “title” of a bill be read on three days in each legislative chamber prior to a final vote on the bill.[22]

Indiana has a transparency website, the Indiana Transparency Portal.[23] Lawmakers said that the website is intended compile Indiana budget data, spending reports and other financial information that previously had been spread across multiple sites.[24] The website, however, does not include updated numbers on exactly what cuts have been made since Republican Gov. Mitch Daniels ordered millions of dollars in reductions after the budget was approved by lawmakers and has been criticized for not showing where taxpayer money goes under job incentives through the Indiana Economic Development Corporation.[24]

In March 2011, the state added agency performance reviews to the ITP and more reports on local government spending.[25][26]

Government tools

Indiana has a database of contracts, available from the Indiana Department of Administration. The State's Active Contracts listing provides an up-to-date list of all professional services contracts in which the state is currently a party.

The following table is helpful in evaluating the level of transparency provided by Indiana Active Contracts:

Criteria for evaluating spending databases
State Database Searchability Grants Contracts Line Item Expenditures Dept/Agency Budgets Public Employee Salary
Department of Administration, Active Contracts
{{{1}}}
N
600px-Red x.png
{{{1}}}
N
600px-Red x.png
N
600px-Red x.png
N
600px-Red x.png
Indiana Transparency Portal
{{{1}}}
N
600px-Red x.png
{{{1}}}
{{{1}}}
{{{1}}}
{{{1}}}
  • Line item expenditures are searchable.[27]
  • Contracts are available.[28]
  • State employee salaries are searchable.[29]
  • Department and agency budget documents are posted.[30]

Support for creation of the database

Governor Mitch Daniels created the contracts website with an Executive Order in 2005.

Multi-Measure Budget Transparency Profile

The Institute of Government and Public Affairs at the University of Illinois has created a multi-measure transparency profile for Illinois, which measures state transparency as of September 2011 using indicators from a range of organizations.[31] These indicators measure both website transparency and other recognized facets of governmental transparency. In addition, IGPA presents four unique indicators of non-transparency based on the observation that transfers or reassignments between general and special funds can obscure the true fiscal condition of a state.

In addition to the individual state profile, IGPA offers a 50-state comparison and profiles for other states.[32][33]

Accounting principles

See also Indiana government accounting principles

Indiana does not have a state controller, rather fiscal duties are split among the Office of Management & Budget (OMB) State Auditor, and State Treasurer.[34][35].

Ryan Kitchell has been Indiana’s OMB Director since 2007.[36] The Legislature, at the Governor's request, created a new organization within state government called the Office of Management and Budget ("OMB"). The OMB brings together the financial and auditing functions of Indiana. The Director of the OMB is the state's CFO.[37]

Tim Berry has been Indiana State Auditor since 2007. The Indiana State Auditor is responsible for:[38][39]

  • Accounting for all of the State's funds
  • Overseeing and disburse county, city, town, and school tax distributions
  • Paying the State's bills
  • Paying the State's employees
  • Administrating Indiana’s Deferred Compensation Plan.

See also

External links

Additional reading

References

  1. National Conference of State Legislatures "State Experiences with Annual and Biennial Budgeting," updated April 2011
  2. 2.0 2.1 2.2 National Association of State Budget Officers "Budget Processes in the States, Summer 2008," accessed February 21, 2014
  3. Indiana Budget Analysis
  4. 4.0 4.1 4.2 4.3 4.4 4.5 4.6 4.7 4.8 4.9 National Association of State Budget Officers "State Expenditure Report, 2011-2013," accessed February 21, 2014
  5. 5.0 5.1 5.2 United States Census Bureau "Annual Estimates of the Resident Population: April 1, 2010 to July 1, 2013," accessed February 26, 2014
  6. 6.0 6.1 United States Census Bureau "Vintage 2009: Annual Population Estimates," accessed February 26, 2014
  7. 7.0 7.1 7.2 National Association of State Budget Officers "State Expenditure Report, 2009-2011," accessed February 24, 2014
  8. 8.0 8.1 National Association of State Budget Officers "State Expenditures Report, 2010-2012," accessed February 24, 2014
  9. National Association of State Budget Officers "State Expenditure Report, 2009," accessed February 24, 2014
  10. National Association of State Budget Officers "State Expenditure Report, 2008," accessed February 24, 2014
  11. 11.0 11.1 The South Bend Tribune "Pence submits lean state budget with new tax cut," January 16, 2013
  12. The Indianapolis Star "Indiana Gov. Mike Pence budget raises education, Medicaid, transportation spending," January 15, 2013
  13. The Times of Northwest Indiana "Pence signs two-year Indiana budget," May 8, 2014
  14. State Budget Solutions "State Budget Solutions' Fourth Annual State Debt Report," January 8, 2014
  15. Washington Examiner "EXography: Unfunded public employee pensions drive state debts skyward," January 21, 2014
  16. State Budget Solutions "State Budget Solutions' Fourth Annual State Debt Report," January 8, 2014
  17. Indiana Public Retirement System "Comprehensive Annual Financial Report for the Fiscal year Ended June 30, 2012," accessed November 8, 2013
  18. Pew Center on the States "Widening Gap Update: Indiana," June 18, 2012
  19. 19.0 19.1 Stateline: The Daily News Service of The Pew Charitable Trusts "Infographic: S&P State Credit Ratings, 2001-2012," July 13, 2012
  20. 20.0 20.1 United States Census Bureau "State Government Finances: 2012," accessed February 24, 2014
  21. Recovery.gov "Stimulus Spending by State," accessed February 21, 2014
  22. Article 4, Section 18
  23. Indiana Transparency Portal (ITP)
  24. 24.0 24.1 "New Ind. website pulls together state budget data" Aug. 31, 2010
  25. Indianapolis Business Journal "Indiana state budget website gets new features" March 14, 2011
  26. Indiana performance reviews
  27. Expenditures
  28. Contract Portal
  29. Employee Salaries
  30. Transparency Portal Budget Information
  31. Transparency profile for Indiana
  32. 50-state comparison
  33. State Profiles
  34. Office of Management & Budget (OMB)
  35. State Auditor
  36. Indiana Finance Authority, “Indiana Finance Authority Members,” retrieved October 21, 2009
  37. Indiana OMB Web site, retrieved October 21, 2009
  38. Indiana State Auditor Web site, retrieved October 21, 2009
  39. Tim Berry