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State pockets $106 million surplus

Pence spending cuts credited – and faulted

– State coffers ended the year in the black, thanks to agency spending cuts, Indiana budget officials reported Monday.

Fiscal year 2014 ended June 30 with an annual operating surplus of $106 million and reserves of $2 billion.

But to get there state agencies had to cut spending by about $150 million because tax revenue came in lower than expected.

In fact, fiscal year 2014 revenue was lower than the previous year, possibly because of a slow economy and tax cuts lawmakers implemented.

“Due to the strong leadership of Gov. (Mike) Pence, our state’s fiscal health is strong and growing stronger,” State Auditor Suzanne Crouch said.

Pence ordered budget cuts in December, including a loss of $33 million to state colleges and universities. Other agencies also returned millions, including $27 million from the Family and Social Services Administration and $12 million from the Indiana Department of Correction.

“In order to help reach this magical $2 billion number, the governor continues to order cuts from already lean state programs without regard for how they will impact citizens,” said Senate Democrat Leader Tim Lanane, of Anderson.

He said public schools are struggling financially, college is less affordable and Hoosiers that adopt special-needs children get no state aid.

“What’s the governor’s plan for the surplus? More tax breaks for businesses? Another $50 taxpayer refund?” Lanane said. “Let’s not congratulate ourselves for hoarding tax dollars while so many of those taxpayers continue to struggle.”

Chris Atkins, head of the Indiana Office of Management and Budget, said the economy is softer than lawmakers thought when the budget was crafted in April 2013.

“National GDP growth … was actually negative in the first quarter,” he said. “There are mixed signals at best in some of the major economic indicators about the health of our economy right now.”

And Crouch said cuts in corporate and inheritance taxes also affected the tax revenue.

But Atkins said the cost of the tax cuts were factored in and the state was still able to increase funding to education, roads and child safety programs.

nkelly@jg.net

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