WTHR |Gov. Daniels announces more spending cuts

Gov. Daniels announces more spending cuts

Rich Van Wyk/Eyewitness News

Indianapolis - Another round of hard spending cuts is ahead for Indiana. The state released new data that shows even less money available for important programs.

Sales taxes, personal income taxes, corporate taxes all fell even further in October. State revenues are now more than $300 million below expectations

With no turnaround in sight, "new actions are necessary to protect Indiana taxpayers," said Gov. Mitch Daniels.

Gov. Daniels ordered state agencies to cut spending five percent in addition to a previous five-percent cut. New building and other projects are on hold.

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. 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."

In the midst of repeated cuts in state spending, two areas remain unscathed: public safety and public education.

Schools and state universities are still in line for a small funding increase. Delivering that additional money, Daniels concedes, will be difficult.

Unless people begin spending and earning more soon and tax revenues improve, the governor says more cuts may be necessary.

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.

See the October revenue report