INDIANAPOLIS — As expected, the state closed its fiscal year with a budget surplus, due largely to spending cuts forced by Gov. Mike Pence.
As of June 30, the state had a $106 million operating surplus and reserves of $2 billion, Auditor Suzanne Crouch reported Monday. Crouch, a Republican and former state lawmaker, praised Pence for Indiana’s strong financial state, saying his wise management decisions kept the state in the black.
“At the end of the fiscal year, we do not want to have to go back to Hoosier taxpayers and raise taxes because we need more money,” she said.
The state finished fiscal year 2014 with a surplus after agencies cut spending by about $150 million from what the Legislature allocated in the biennial budget crafted last year. Pence ordered those cuts last December, when tax collections were less than expected.
Crouch said corporate and inheritance tax cuts implemented by lawmakers were part of the reason that revenues were lower. State budget director Chris Atkins said an economy that hadn’t rebounded as quickly as projected was also partly to blame.
The surplus, which rolls into the state’s $2 billion reserve, is touted by Republicans as evidence of Indiana’s sound fiscal state. But it’s already become a political issue. Democrats have accused Pence of creating a financial picture that ignores the state’s unmet needs.
“In order to help reach this magical $2 billion dollar number, the governor continues to order cuts from already lean state programs without regard for how they will impact citizens,” Senate Democratic Leader Tim Lanane, D-Anderson, said in a statement. “Let’s not congratulate ourselves for hoarding tax dollars while so many of those taxpayers continue to struggle.”
The cuts ordered by Pence from the state’s $14 billion annual budget included $34 million from colleges and universities, as well as $12 million from the Department of Correction.