A free thinker in the Heartland...

Wednesday, July 12, 2006

Indiana, back in black?

We have a budget surplus in Indiana... but. From the Indianapolis Star:

For the first time in three years, Indiana has a surplus in its primary checking account, but Gov. Mitch Daniels warned against anyone planning a spending spree.
Still, Daniels said the surplus of more than $370 million in the state's general fund -- achieved through spending restraint and some greater-than-expected growth in tax revenues -- does give the state some flexibility heading into next year's budget-writing session.

I know what you are thinking, this is because of the toll road lease... well that money isn't included according to the article. But we are not in the black yet though...

There is a big asterisk.

Indiana owes schools, local governments and universities $622 million in payments that had been delayed in 2002 to help the state make ends meet. Schools received $156 million of that in January, and Daniels said he "well might" announce today, as he travels to several Indiana cities, that more of the delayed payments will be repaid.

"We are in this unexpectedly stronger position. Being so far ahead of schedule does give us new flexibility, and we are looking at it this very day," he said.

What do the Democrats say?

Democrats countered that the budget was balanced on the backs of property taxpayers.

Daniels called that "bogus," noting that property taxes have dropped this year. House Minority Leader B. Patrick Bauer, D-South Bend, cited city after city where property taxes have instead soared and said the big hit is coming next year.

The 2005 budget, Bauer said, paid for education increases by pushing the costs off the state and onto property taxes. That budget also capped money the state sends to local government for property tax relief.

Lawmakers this year tried to ease that burden by passing a one-year increase of the homestead credit. But that is gone next year.
Bauer said that if there is any flexibility in next year's budget, "Job One is property tax relief, absolutely."

Steve Johnson, a former Republican state senator who is head of the nonpartisan Indiana Fiscal Policy Institute, agrees property taxes are expected to rise next year. He said the budget passed in 2005 did contribute because it "effectively flat-lined education, so any increase essentially came through property taxes."

But, Johnson said, the Daniels administration and the legislature deserve credit for reining in spending during tough times.
Johnson said he's concerned about next year. The budget was based on a forecast of 5.3 percent economic growth -- a figure that caused him to laugh when he was asked if that was too optimistic.

"My first thought is that it's a wish and a prayer," he said.

I know property taxes here went UP. I will survey some fellow hoosiers in my area and get a better feeling on it. The "wish and a prayer" comment though left me wondering about the numbers though...