Indiana lawmakers cautiously optimistic over 2015 revenue forecast

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INDIANAPOLIS, Ind. (Dec. 18, 2014) - State lawmakers now have an idea of what they’re working with for the 2015 session.

The State Budget Committee heard the revenue forecast for the next budget cycle Thursday.  Indiana is looking at a slight uptick in revenue, and now many lawmakers, and the Governor say they are cautiously optimistic for the year ahead.

Economists forecasted state revenues in the coming years will be up slightly -  a 2.3% increase in 2015 and 2.4% increase in 2016. You can read the revenue forecast on the state's web site.

“This revenue forecast should be an encouragement to every Hoosier as it projects economic growth,” said Pence.

But will the numbers be enough to fund the Governor’s agenda slated with an overhaul of the state’s education system?

“With the forecast, is there enough money to do everything the Governor wants to do? I don’t know,” said State Representative, Terry Goodin (D – Austin).

Goodin sits on the budget committee.  With modest revenue gains, he’s not so sure spending in the Hoosier state will be what it once was.

“We have to approach this next budget writing session very cautiously. I think Senator Kenley said it well and so did Representative Brown that we’re cautiously optimistic and I think we’ve all got to take that position as we move forward,” he said.

Indiana saw modest upticks in sales tax revenue.  Lower gas prices are also trending state wide.  That, forecasters said, points to more money for Hoosiers to spend and stimulate the state’s economy.

Casinos though were dealt the hardest hand of the year.  Competition from casinos in neighboring states led to lower casino revenues here in Indiana.

The industry is now hemorrhaging money, with revenue dropping 30% in November alone.

“From our peak, we’re down about 4,000 machines. That would be like eliminating four casinos the size of Tropicana in Evansville,” said Indiana Casino Association President, Mike Smith.

What once was a winning source of revenue for the state is down nearly 10% from last year.

“As time goes on, hopefully we can get some of our issues resolved at the legislature,” said Smith.

Many lawmakers, in an attempt to get that source of revenue closer to where it once was, are looking to pass pro-casino legislation in the upcoming session.

House Ways & Means chair Tim Brown, R-Crawfordsville, issued the following statement about today's revenue forecast:

“When considering today’s revenue forecast, first and foremost, our focus should be on how this projection impacts Hoosiers all across the state. The forecast indicates signs of an improving economy, which means a brighter future for Hoosier families. After all, state government benefits from additional tax dollars only when Hoosiers are employed and have extra dollars to spend in the local economy.

“The numbers we saw today made it clear that Indiana is economically outperforming all of its neighbors, which is a direct result of the hard-fought economic policies put into place over the past decade. Many of the policies were challenging to enact, but there should be no doubt that these policies have paid dividends for Hoosier families.

“The existence of new, spendable revenues will create challenges as well as opportunities when it comes to crafting the next biennial budget. Therefore, we must remain vigilant, in holding to the principles of fiscal discipline, that created the favorable financial position we enjoy today; mainly the principle that government should always live within its means.

“The new revenue and economic forecasts give us many reasons to be optimistic about the future of Indiana’s economy but most importantly, the continued economic prosperity of Hoosier families.”

But the ranking minority member, state Rep. Greg Porter, D-Indianapolis, had a different take. Porter issued this statement Thursday:

“It would be great to be happy about the fact that there will be an overall increase in state revenues over the next biennium, but we cannot do that without admitting that we are giving the people of Indiana an incomplete picture about the way we fund state government.

“For all the talk today, there is only one number that means anything when it comes to the way this administration runs your government: $2 billion. That is their cherished figure because it represents a surplus amount that is supposed to show the world that Indiana is being run the right way.

“So it really doesn’t matter how much additional revenue our state expects to get, until you try and figure out how the administration will game the numbers to keep $2 billion in the bank at whatever cost. Past practice will indicate that services will run a poor second to keeping the bottom line healthy.

“We are still relatively early in the process of writing a new biennial state budget, but plenty of warning flags have been raised.

“The state’s Department of Child Services (DCS) needs at least 77 new case managers to provide adequate services to Hoosier children at risk. However, agency officials have said they won’t seek the funding for these positions…positions that could have been easily funded if DCS hadn’t been so intent on reverting hundreds of millions of dollars back to feed the surplus.

“While the state Department of Health might claim that reducing infant mortality and tobacco usage are its two top priorities, the agency’s budget proposal contains no new money for tobacco cessation and no funding at all for preventing infant mortality.

“The state Board of Accounts has finally come clean about its inability to do its job as a fiscal watchdog for local units of government, thanks to inadequate funding.  However, instead of seeking new funding, the agency is choosing to ask those local units and schools to pay more for the audits that need to be performed upon them, as required by state law.

“In  order to live up to our commitment and let our state’s brightest young minds get a college education through the 21st Century Scholar’s program, it will require an additional $90 million in state funds. Let us be hopeful that this commitment remains firm at a time when such figures seem more of a target for reversions.

“We also have seen plenty of opportunities to view whether those budget priorities should remain out of whack. Is it okay to automatically give more than $80 million in additional funding to the Department of Corrections, yet commit only $10 million toward pre-K? Is it right that our commitment to feeding Indiana’s hungry is worth less than $300,000 a year, while we lavish more than $1.6 million on a Bicentennial Torch Run?

“Above all, are any of these things going to become reality if we do not meet the revenue targets and this governor again cuts funding, a move that has caused immeasurable harm to our state’s public schools in the recent past?

“If the revenue numbers announced today are true, the Legislature will have a perfect opportunity to right many past wrongs. I will be optimistic for now, but the allure of that $2 billion sitting in the bank has been too great for this governor and his majorities to make me think that many vital services and programs don’t remain at risk.”