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Nov-07-2009Indiana governor announces more spending cuts(topic overview)
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Indiana tax collections continue to fall short of projections, and that has prompted Governor Mitch Daniels to order spending cuts and other steps to offset a budget shortfall. Daniels says revenues are off more than $300 million thus far this fiscal year, and if the trend continues without cuts, the state's reserves will be wiped out by next August. [1] Daniels said Friday that tax collections for October were $46 million below forecast, and are $310 million behind for the first four months of the fiscal year. He says if the trend continues without spending cuts, Indiana's reserves would be wiped out by next August. He's ordered state agencies to cut spending by 10 percent, reduced reimbursements to some Medicaid providers.[2]
If the current revenue trend continues and the governor had not ordered spending cuts, state budget agency officials estimate the reserves would be depleted by August, 2010. "We agreed to dip into reserves $300 million over two years and now it's gone in four months," Daniels said.[3] The governor said the state ended Fiscal Year 2009 with $1.3 billion in reserves. In a statement issued Friday, he said if he had not ordered spending cuts and the current trend continues, state budget agency officials estimate the state's reserves would be depleted by August 2010.[4]
The governor is directing state agencies to cut spending by ten-percent, reducing reimbursements to some Medicaid providers and says the state will offer voluntary unpaid leave for the rest of the fiscal year. Daniels says he doesn't know yet if there will be any job cuts. "Up to this point, we have managed economy in state government with few if any involuntary terminations, except for poor performance.[1] Among other things, Daniels has ordered agencies to cut spending by 10 percent; reductions in reimbursement rates for some Medicaid providers; no pay raises for state employees next year; delays in some building projects; and state employees be allowed to take unpaid leave voluntarily.[5] INDIANAPOLIS - Gov. Mitch Daniels announced a host of spending cuts Friday, including 10 percent spending reductions for all state agencies - a move that could result in state employee layoffs. Other actions include eliminating pay increases for state employees; transferring money from some dedicated funds to aid the state's main checking account; cutting Medicaid reimbursement rates for some providers; and a moratorium on state agency capital projects.[6] Daniels said the cuts, designed to reduce the budget by $300 million to $400 million, include an additional 10 percent cut for state agencies, reduced reimbursements to some Medicaid providers and no pay raise for state employees in 2010, marking the second year workers have gone without a raise.[7]
The two-year budget enacted in June would increase funding for school operations by 1.1 percent in 2010 and 0.3 percent in 2011. It cut most agency spending by 10 percent from the previous budget, and now agencies must reduce spending by another 10 percent. Daniels said agencies would be given flexibility in how to reduce spending, but he hoped employee layoffs could be avoided or minimized. He also wants to avoid furloughs.[5]
Daniels had quietly asked agency heads in July to trim five percent from a budget that already cut spending about 10 percent for most of them. He says the still-dismal economy means they need to go five percent further, a step which could mean layoffs. "Up to this point, we have managed economy in state government with few if any involuntary terminations, except for poor performance.[8]
Gov. Mitch Daniels spoke in West Lafayette Thursday, focusing on the economy and numbers from the state budget, which he called "sober." Daniels stressed the importance of keeping taxes low and continuing to find ways to cut spending so Indiana "can come out of this recession earlier and much stronger than other states. "This has been our attitude. Everybody abhors the idea of a recession, but if there's going to be one then we want our state to try to meet it head on," he said.[9] In West Lafayette on Thursday Governor Mitch Daniels could not say yes or no to the question of whether or not there would be job cuts. Governor Daniels called the upcoming announcement both unwelcome and unpleasant. "If anybody is displaced we will make sure they go to the front of the line for any vacancy that may come up," Daniels told reporters after a Chamber of Commerce luncheon at the University Plaza Hotel. The budget troubles are being caused again by dismal monthly state income numbers.[2]
Governor Daniels will announce the October revenue numbers and possible budget or state job cuts at a 10:30 AM Friday news conference.[2] State Misses Revenue Forecast for 13th Straight Month By Eric Berman 11/6/2009 Governor Daniels is ordering state agencies to cut their budgets by 10 percent, after the state's tax revenue fell short of expectations for a 13th straight month.[8]
INDIANAPOLIS -- Gov. Mitch Daniels announced Friday a series of cuts prompted by an increasingly bleak state revenue picture. October revenue was $46 million below the forecast, building a shortfall of more than $300 million in the first four months of the fiscal year and causing Daniels to implement a series of cuts he hopes will keep the state afloat, 6News' Norman Cox reported.[7] Indianapolis - Governor Mitch Daniels on Friday ordered state agencies to make spending reductions, following the fourth straight month of lower than expected state revenues for Fiscal Year 2010.[3]
INDIANAPOLIS — Indiana Gov. Mitch Daniels announced on Friday a series of spending cuts and other steps to offset a continuing multimillion-dollar dive in state revenues.[5] Indiana Gov. Mitch Daniels has announced a series of spending cuts and other steps designed to offset a continuing multimillion dollar decline in state revenues.[2]
Daniels said the steps announced Friday should cover the current $309 million revenue shortfall and would help avoid spending cuts for public schools. He did not rule out education cuts if revenues continue to fall significantly below projections. He commended state school superintendent Tony Bennett for telling local school superintendents on Thursday that they should hold off on major new expenditures or new collective bargaining agreements.[5] If the trend continues at that rate without cuts, Daniels said the state's surplus that stood at $1.3 billion in July would be wiped out by next August. He also said some money from accounts created for specific purposes would be transferred to the state's main checking account. Amounts would vary but would not disrupt the long-term viability of programs supported by those accounts. "At this point, we have seen enough to know that new actions are necessary if we are going to protect Indiana taxpayers against the tax increases that are happening in most of the rest of America," said Daniels, a Republican. "I hope many of them are temporary and hope some of them can be reversed at some time during the current two-year budget cycle, but it's at least as likely it will have to be followed by more actions."[5]
State employees will not receive a pay increase in 2010, the same action Governor Daniels took in 2009. Governor Daniels said he will not accept his full pay in 2010, the same action he took for 2009, when his salary was scheduled to increase from $95,000 to $107,882.[3] Payments to some Medicaid providers are being reduced and and for the second consecutive year, state employees, including the governor, aren't getting raises. The governor was due for a salary increase from $95,000 to $107,000 in 2009 and he did not take that increase either. "Anyone who says we should not be taking these actions today should be asked what tax do you plan to raise.[4]
I can't say that that will remain the case here," Daniels warns. "If anybody is displaced, we will put them at the front of the line for any openings." Daniels is freezing state employees' pay, including his own, for a second straight year. Daniels says he believes the cuts can be carried out without affecting vital services. He says agency heads have brainstormed for years about what programs would be easiest or hardest to cut, and where savings could be realized.[8]
Daniels did not say which health care providers would receive less from Medicaid, the state and federal health care program for the poor and disabled, but it would not be doctors. He said the state's social services agency would announce the specific cuts next week. House Speaker Patrick Bauer, D-South Bend, said many of the cuts announced by Daniels were understandable, and he also hoped to avoid cuts in school aid. "It was cut pretty much to the bone in the budget that was passed," Bauer said. Bauer said he had advised his caucus that he would not consider any bills that spent money from the state's main checking account during the legislative session that starts in January. He said he wanted more information about where the Medicaid cuts would come from.[5] The governor said priority will still be given to public safety and public education services. He said he does not want to dip any further into the state reserves. Daniels has scheduled a 10:30 news conference this morning to talk about state revenue. ELLSWORTH DRAWS FIRE OVER AMENDMENT: Eighth District U.S. Rep. Brad Ellsworth, D-Ind., might have expected that his amendment to the health care reform bill, which he says will ensure no federal funds are used to provide elective abortions, would be opposed by Planned Parenthood ( Evansville Courier & Press ).[10]
DANIELS HINTS AT 'BAD NEWS'; LAYOFFS: Gov. Mitch Daniels hinted Thursday at more bad economic news for the state during a visit to West Lafayette. Speaking at a luncheon sponsored by Greater Lafayette Commerce, Daniels said state revenue figures from October were lower than expected (Lafayette Journal & Courier). He did not go into detail, saying the figures were not yet final.[10] Gov. Mitch Daniels visited West Lafayette today and said that although the state is doing better than many other states, its economy is still not out of the woods.[11] WEST LAFAYETTE, Ind. (WLFI) - Governor Mitch Daniels delivered what he called a "sober message" on the economy Thursday in West Lafayette.[12]
Indiana Governor Mitch Daniels is expressing his opposition to healthcare overhaul legislation coming up for a floor vote in the U.S. House.[13] Among other complaints, Daniels says the legislation is too expensive and has too many drawbacks for Hoosiers. He says he wasn't planning to get into the debate, but now that House legislation is nearing passage, he decided to write a letter to Indiana's congressional delegation. "I just thought, as opposed to being silent, I should respond to those who have said, 'What does this mean to Indiana?'" says Daniels.[13]
He'''s also rereading the bill to understand what has changed. Hill said he'''s particularly pleased the proposal would '''allow several thousand small businesses in Southern Indiana to obtain affordable health care coverage for their employees and provide tax credits to help reduce health insurance costs for a similarly significant number.''' He said making health care affordable for small businesses is one of the ways he'''s measuring the final legislation. '''This is only one aspect of the bill, but hopefully serves as an indicator to how closely I am reviewing the bill and its impact on my constituents,''' Hill said. '''I would also encourage folks to continue contacting me with their comments and concerns.'''[10] Consumers would have the option of picking a government-run plan, the most hotly contested item in the legislation and the basis for the Republican claim that Democrats were planning a government takeover of the insurance industry. Democrats said their bill was designed to spread coverage to millions who lack it, ban insurance industry practices such as denying coverage on the basis of pre-existing medical conditions and restrain the growth of health care spending nationally.[14] Democrats hold 258 seats in the House and can afford 40 defections and still wind up with 218, a majority if all lawmakers vote. The White House issued a statement of support for the measure, saying it "meets the president's criteria for health insurance reform: It assures that all Americans have access to quality, affordable health care that is there when they need it and does so without adding a dime to the deficit." Months after Obama urged lawmakers to remake the health care system, House Speaker Nancy Pelosi and the leadership struggled to resolve controversies over the bill's treatment of illegal immigrants and insurance coverage for abortion, issues that transcend health care and have long divided the Democratic cacus as they do the nation.[14] The controversy surrounding illegal immigrants remains "a work in progress," Rep. Nydia Velazquez, a New Yorker and chairwoman of the Hispanic Caucus, said after a mid-day meeting in Pelosi's office. As drafted, the legislation permits illegal immigrants to purchase coverage with their own money inside the insurance exchange that would be created - a provision that the 23-member Hispanic Caucus wants retained in any final compromise that reaches Obama's desk. One lawmaker who attended the sesssion, speaking on condition of anonymity to discuss the private talks, said members of the Hispanic Caucus sought and received assurances from Pelosi that she and the leadership would support them as the bill made its way through the House and ultimately to the president's desk. This lawmaker said the speaker was not able to get a pledge in return that the Hispanics would all vote for the bill regardless of how their issue was ultimately settled.[14] Senate votes could slip until next year, but in the House Democratic leaders pressed forward. They expressed optimism that when it came time to vote, they'd have the majority needed to prevail in the 435-seat House. Asked Thursday if she had the votes, Speaker Nancy Pelosi replied: "We will." HILL SEES 'GOOD THINGS' IN HOUSE BILL: U.S. Rep. Baron Hill, D-9th District, said Thursday that although he continues to study the legislation, he'''s found some things to like about it ( Louisville Courier-Journal ).[10]
The Congressional Budget Office said that if enacted, the measure would extend coverage to 96 percent of all eligible Americans within 10 years. Obama and his administration lobbied furiously for its passage. Rep. Jason Altmire, a second-term Democrat from western Pennsylvania, said he received calls during the day from the president, White House Chief of Staff Rahm Emanuel, Health and Human Services Secretary Kathleen Sebelius and Education Secretary Arne Duncan. Their message was "this is a historic moment. You don't want to end up with nothing," he said. Altmire added his callers emphasized the legislation would change once it left the House, but if it's defeated now the drive to enact sweeping changes would be over for the foreseeable future. He said he remained undecided on his vote. Several Democrats have already announced their opposition, most of them moderate to conservative members of the so-called Blue Dog Coalition.[14]
Action on health legislation was slowed as senators waited for the Congressional Budget Office to weigh in on a bill written by Majority Leader Harry Reid in consultation with the White House and key committee chairmen.[10] WASHINGTON -- Amid intense lobbying by the Obama administration, House Democratic leaders struggled Friday for the final votes needed to pass sweeping health care legislation, weighing fresh concessions to abortion opponents and working to ease concerns among Hispanic holdouts. "We're very close" to having enough votes to prevail, said Majority Leader Steny Hoyer of Maryland, although he added a scheduled Saturday vote could slip by a day or two and sought to pin the blame on possible Republican delaying tactics.[14]
The legislation will likely clear the House with no Republican support. It would then be reconciled with an overhaul bill passed by the Senate before going to both chambers for a final vote.[13] Diane Havens, a Wyckoff, N.J., voice actor, has rounded up 120 other voice actors to make audio recordings of most of the health bills, including the latest House version. More than 800,000 people have downloaded or listened to the legislation on her free Web site since early September. Ms. Havens said she liked the recording so much she listens while exercising on an elliptical machine. "I have a whole iPod just for it," she said.[15]
None of us really objected to the Ellsworth language. We think he did a good job.'' ''' Rep. Louise Slaughter, D-N.Y., co-chair of the Congressional Pro-Choice Caucus and chairwoman of the House Rules Committee.Ellsworth spokeswoman Liz Farrar provided a written statement from Ellsworth: "As I have said repeatedly, I will not support a bill that I believe would result in federal tax dollars being used to pay for abortions, and, with the help of pro-life constituents, I am leading the effort to protect federal tax dollars and provide pro-life insurance options to Americans," it said.[10] The abortion rights group weighed in with a statement of opposition on Tuesday. The Ellsworth amendment, which House leaders have said they may incorporate into the bill, also has sparked a furious backlash among national, state and local anti-abortion groups who typically support Ellsworth.[10]
GOP leaders boasted that all 177 House Republicans stood ready to oppose the $1.2 trillion bill, which would create a new federally supervised insurance marketplace where the uninsured could purchase coverage.[14]
Voting is set for Saturday on the 10-year, $1.2 trillion legislation that embraces Obama's goals of extending health coverage to tens of millions of uninsured Americans and putting tough new restrictions on insurance companies.[10]
For the first three months of the fiscal year, revenue was $254 million below a May forecast. "We'll evaluate programs and those that aren't working, even if they have a great purpose or intention, we'll probably be stopping a few more of those," Daniels said. "Up to this point we've had no involuntary job reduction I don't know if we can maintain that level."[10] For the first three months of the fiscal year, which began July 1, revenue was $254 million below a May forecast. For more on this story, read Friday's J&C.[11] For the first four months of the fiscal year, general fund revenues are $309 million below projections, a decrease of 7.4%.[3]
Last month, Daniels announced that revenue for the first three months of the fiscal year had dropped nearly $500 million from the previous year.[7]
The state is now $309 million short of where it expected to be in the fiscal year which began July 1. Tax collections have fallen short of the state's official budget forecast every month since last October, even though analysts have lowered their expectations three times in that span. Daniels notes the shortfall for the year matches almost exactly the $300 million he agreed to spend from the state's $1.3 billion surplus over the full two years. He's remaining adamant the state must hang onto the surplus as a solution of last resort, declaring the only other option if the surplus is wiped out would be tax hikes.[8] October tax collections were $46 million less than forecast in May and $309 million, or 7.4 percent, less than expected during the first four months of the fiscal year.[5]
For the first four months of the fiscal year, the state has collected $309 million less than expected, which jeopardizes the two-year state budget legislators passed in June.[6]
The governor ordered reductions that are expected to save the state $300 million to $400 million over the two year budget cycle.[3] Indiana is one of only 9 states in America that has a "rainy day fund." The state used $300 million of the $1.3 billion fund in the first quarter of this year.[2]
The Delphi Community School Corp. is leading the charge toward a class action lawsuit against the Indiana State Teachers Association insurance trust. Delphi had built up a reserve of about a half million dollars that they would have used to offset insurance premiums this year - money they'd save in general funds.[11] Daniels is repeating a warning that could change if the numbers don't improve. He's cautioning local superintendents not to get locked into long-term spending commitments. Many school systems are already facing funding cuts, but Indiana is one of the few states with an overall increase in school spending this year.[8] State leaders will soon have to make some "unwelcome and unpleasant choices" to reduce spending possibly through job or program cuts, Daniels said.[10] Gov. Daniels ordered state agencies to cut spending five percent in addition to a previous five-percent cut.[4]
The governor said state leaders will soon have to make some "unwelcome and unpleasant choices" to cut spending. He expects more specific announcements will be made by the end of the week.[11] The governor ordered 5% cuts in July. The lieutenant governor, auditor, treasurer, secretary of state, and superintendent of public instruction have all committed to 10% spending reductions in their office budgets.[3]
Unless people begin spending and earning more soon and tax revenues improve, the governor says more cuts may be necessary.[4] Reduced consumer spending and high unemployment have depressed the state's two biggest revenue sources -- sales and income tax.[7]
Agencies will also offer employees the chance to take unpaid leave. Daniels says those and other steps should offset the shortfall in revenue to date, but more action might be needed if tax collections continue to miss their target.[2] Pressed by reporters about possible layoffs of state employees, Daniels would not be specific.'''' "Up to this point, we've had no involuntary job reductions, other than those for poor performance.[12] Thursday's story Indiana's 33,000 state employees have reason to be concerned about the future of their jobs.[2]
State Employees Association Executive Director, David Larson, says more cuts will turn into misery and inefficiency. "In some of these parole offices they're asking the secretaries to do the shake downs of inmates that come in," Larson told FOX 59 News.[2] Next year will mark the second consecutive one in which state employees will not get pay raises.[5]
The governor also put a plan in place to allow voluntary unpaid leave for state workers and said most capital projects will be deferred. Most employees 6News talked to said they understood the governor's position. "It's probably what I expected.[7]
The governor said his administration is working to retain jobs but he won't know what needs to be done until analyzing the October state revenue numbers.[2] The governor told members of Greater Lafayette Commerce that state revenue in October was below projections for the fourth month in a row.'' He said his administration is still working to deal with the shortfall. "We look for programs, we evaluate programs, and those that aren't working, even if they have a great purpose, or intention, we'll probably be stopping a few more of those.[12]
Without revealing details, Daniels said the state's revenue numbers from October were lower than expected - marking the fourth consecutive month of disappointing revenues.[11] Daniels said the October revenue was lower than the same month a year ago, and the month's figures will mark four consecutive months of disappointing revenue.[10] Daniels said if revenue collections don't pick up, it is still a possibility.[6]
"We have seen enough to know that new actions are necessary if we are going to protect Indiana taxpayers against the tax increases that are happening in most of the rest of America," Daniels said.[3] With no turnaround in sight, "new actions are necessary to protect Indiana taxpayers," said Gov. Mitch Daniels.[4]
Daniels largely exempted public safety and education from the budget cuts hammered out with the legislature in June. The Department of Correction and the state police will make the 10-percent cuts, but Daniels says he doesn't expect any effect on safety. [8] The budget Daniels and state lawmakers put together using the May forecast had called for the state to have a $1 billion surplus at the end of the spending cycle in June 2011.[5] Reductions ordered by the governor include state agencies reducing spending by at least 10% from the as-passed budget.[3]
State agencies will offer voluntary unpaid leave for the remainder of the current fiscal year.[3]
NO DONNELLY POSITION: U.S. Rep. Joe Donnelly has yet to state a position on the Pelosi health reforms up for a vote on Saturday. Donnelly said earlier in the week that he was reading the bill. [10] "We're very close" to having enough votes to prevail, said Hoyer of the health care reform bill Friday, Nov. 6, 2009, although he added a scheduled Saturday vote could slip by a day or two.[14] I am strongly against the health care Bill. PLEASE do everything within your power to stop this madness.[13]
The bill would be paid for by cuts in future payments to Medicare providers as well as a surcharge of 5.4 percent on income tax filers with income of $500,000 for individuals and $1 million for couples. [14] In the midst of repeated cuts in state spending, two areas remain unscathed: public safety and public education.[4] Daniels said at the time that if the numbers didn't turn around quickly, budget cuts were inevitable.[7] For the moment, cuts to Indiana's K-12 and higher education budget were avoided.[6]
"I know the governor's announced some cuts. Many of those are unavoidable," he said. The governor said additional cuts may be coming that would include public schools, but he hopes to avoid that at all costs. This material may not be published, broadcast, rewritten or redistributed.[7]
Tell us now," said Daniels, challenging potential critics. House Speaker Pat Bauer, often critical of the governor, agreed with his decisions. "Many of those are unavoidable," Bauer said, although he questions reducing Medicaid payments. "This goes to people who are sick and in some cased dying."[4] If it passes, historians say, the bill, weighing in at nearly 20 pounds, would be among the longest pieces of House legislation ever.[15] The 1,990-page health-care bill in the House is one of the weightiest pieces of legislation on Capitol Hill.[15]
Hill, who voted for an earlier version of the health bill in committee, said he'''s getting several updates every day about calls, e-mails and letters he'''s received about the legislation.[10]
President Bill Clinton's failed health-care bill was 1,342 pages. Nobody can remember a bill as big as this year's health bill.[15]
The bill provides federal subsidies for consumers at lower incomes to to defray the cost of insurance. Most individuals would be required to buy coverage and large businesses would have to provide it to their employees.[14] Federal law currently prohibits the use of federal funds to pay for abortions except in the case of rape, incest of situations in which the life of the mother is in danger. That left unresolved whether individuals would be permitted to use their own funds to buy insurance coverage for the procedure in the federally backed insurance exchange envisioned under the legislation.[14] A compromise proposal backed by Rep. Brad Ellsworth, D-Ind., would allow it, so long as abortions weren't paid for from federal funds used to subsidize insurance policies bought by lower-income individuals and families. While that was enough to satisfy some, other abortion foes objected, backed by the U.S. Conference of Catholic Bishops, and Democrats weighed possible concessions that could satisfy them without losing votes from abortion rights Democrats. It was not clear precisely what changes were under consideration, but officials said they would involve additional restrictions on the availability of abortions.[14] HOUSE TO VOTE ON HEALTH REFORMS SATURDAY: House Democrats are scrambling to secure enough support to pass President Barack Obama's historic health overhaul initiative, working to soothe last-minute concerns from rank-and-file Democrats ahead of a make-or-break vote ( Associated Press ).[10]
Staffers with poor eyesight complained. Rep. Glenn Thompson (R., Pa.), who carries the bill in a reusable Giant Foods shopping bag, said he left his copy unattended on the House floor, triggering a security alert.[15]
The news came as revenue collections for October showed the state taking in fewer tax dollars than forecast. [6] "Indiana has distinguished itself among the states, avoided tax increases, maintained all vital services, because we have been willing to act on time, to deal with our difficulties."[3]
Daniels said it might be possible to give some bonuses to outstanding employees. [5]
SOURCES
1. 89.3 WFPL | Daniels Orders Budget Cuts
2. Indiana State Job Cuts - WXIN
3. Governor orders state spending cuts
4. Gov. Daniels announces more spending cuts - WTHR |
5. The Associated Press: Indiana governor announces more spending cuts
6. Daniels announces 10_ spending cuts for all state agencies | The Journal Gazette, Fort Wayne, Ind.
7. Governor Plans Cuts In Face Of Awful Revenue Picture - Indiana News Story - WRTV Indianapolis
8. Governor Orders Budget Cuts for State Agencies | Indy's News Center - 93.1 WIBC Indianapolis - Live. Local. First.
9. The Exponent - Purdue's Student Newspaper
10. Nov. 6, 2009 HPI Daily Wire | Howey Politics Indiana
11. PM Update | jconline.com | Journal and Courier
12. Governor offers revenue warning | WLFI - West Lafayette, Indiana
13. 89.3 WFPL | Daniels Urges Delegation To Vote Against Healthcare Bill
14. House Dems struggle for final votes on health care - Business - Nation - TheState.com
15. Does This Bill Have a Weight Problem? - WSJ.com
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