Indiana Governor Announces More Spending Cuts

MIKE SMITH

INDIANAPOLIS (AP) — 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.

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.

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. 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.