Kansas Suspends Income Tax Refunds - PDF

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					    Making Ends Meet:
An Update on Indiana’s Next
      Biennial Budget

     Governor Mitch Daniels
              Many States Face Fiscal Crisis
                        Projected FY 2009 and 2010 State Budget Shortfalls
      $413 M
      $509                                                                                                     $250 M
                               $65 M                                                                         $88 M         $150
                                                                                                                           $838 M

                    $218 M                             $426 M
   $166 M                                                                                                                       $2.4 B
                                            $27 M                  $594
                                                                   $450 M                                     $1.7 B
                                                                                   $600 M
                                                                                                                             $372 M
                                                           $137 M                                       $2.3
                                                                                                        $2.0 B              $1.7 B
          $751 M                            $56 M
                                                                                          $1.2 B                            $3.6 B
                      $354 M                                           $2.3 B
$14.8 B                            $604
                                   $101 M                                                                                   $606 M
                                              $211 M                                                    $1.138 B
                                                              $342 M
                                                                                     $459 M                               $691 M

                    $1.2 B
                    $1.6                                                        $1.0 B
                                 $500 M                                                            $724
                                                                                                   $871 M

                                                                                            $2.5 B
                                                                             $1.1 M
                                                                       $86 M $458B

                                                                $341 M

                                                                                                     $5.0 B
          $1.65 B

                                                       Source: Center for Budget and Policy Priorities and various news clips
              2/27/2009                     $295 M     Figures reflect best available information on FY09 budget shortfalls. States
                                                       shaded red without shortfall figures are projecting FY10 budget shortfalls.
    Fiscal Crises in Other States
   At least 32 states are either proposing or
    implementing cuts to K-12 education
   At least 29 states are either proposing or
    implementing cuts to healthcare:
       California is cutting SCHIP – could result in 260,000 children losing
        coverage by 2011
       Minnesota’
        Minnesota’s proposed cuts would result in 114,000 fewer people
        enrolled in state healthcare programs in FY2011
       Washington has proposed to reduce healthcare for poor by 42%

   At least 24 states have proposed raising taxes
   At least 8 states are either proposing or
    implementing early release of prisoners
       Kentucky has released 2,000 prisoners early, including violent
        offenders and murderers
  Headlines from Other States
 Arizona                                   Kansas
          K-
      Cuts K-12 education $300M                Gov suspends state income tax refunds
     Closes 5 state parks
     Furloughs higher education
                                            Michigan
      employees 10-15 days
                 10-                           Gov’
                                                Gov’s budget calls for 1,500 layoffs
     More than 1,100 layoffs                  Gov’
                                                Gov’s budget releases prisoners early
                                               Gov’               K-
                                                Gov’s budget cuts K-12 education $164M
 California                                   Gov’
                                                Gov’s budget ends funding for State Fair
     Furloughs of 2 days/month for
      200,000 state employees               Nevada
     Layoffs of up to 10,000 possible         Gov recommends 6% pay cut for state
     Delaying tax refunds to 10 million        employees, including teachers
      taxpayers                             Ohio
 Georgia                                      Gov’
                                                Gov’s budget drains Rainy Day Fund
     Gov proposes to repeal $428M in                employees’
                                                State employees’ pay cut by up to 6%
      property tax relief                   Virginia
 Hawaii                                       Gov ‘s budget eliminates 1,500 jobs
     Gov proposes cutting monthly TANF        Gov’
                                                Gov’s budget releases prisoners early
      benefits for poor families by 25%        Gov’
                                                Gov’s budget cuts Medicaid $418M

 Illinois                                  Washington
     State owes $4B in unpaid bills           Closing 13 parks
     State borrowed $1.4B to pay bills        Releasing prisoners early
     Deficit to grow to $9B this year
 FY 2009 Revenues
Actual vs. Forecasted
State Budget History
                      State Reserves
                 (Cash Balance – Liabilities)

General Fund and Property Tax Replacement Fund expenditures only.
FY02 and after: expenditure growth is adjusted to account for the payment delays and excess reversions.
         FY 2010-2011 Budget

 Total Revenue: $28.354 billion
     Assumes December 2008 forecast is accurate

 Total Appropriations: $28.344 billion

 Projected Reserves of $1.3 billion same
 as close of FY 2009
       Revenue Forecast
April 2007 v. Dec 2008 ( $s in millions)

Principles for the FY2010-11 Budget
  Honestly balanced budget (NO gimmicks)

  NO tax increases

  Protect Reserves

  Funding priorities
      Public safety
      K-12 education
      Medicaid
      Protecting children
       House Passed Budget
 Wipes out all of the state’s reserves in a
  little over a year (more than $1.3B)
 Would result in a tax increase
 Raids the Healthy Indiana Plan
 When federal stimulus dollars for Medicaid
  and education are included, increases
  annual spending by more than 9%
Indiana’s Share of Stimulus Funds

   Additional funds allocated directly to Hoosiers through
    individual and business tax relief, food stamps and
    unemployment insurance benefits
Danger! Don’t Create a Cliff in
    Education Funding
 Legislative Update—Property
           Tax Caps
 Provides permanent property tax
  protection for Hoosier taxpayers (1% on
  homes, 2% on rental/ag, 3% on all
 Last year: passed both houses
 This year: needs to pass both houses to
  go to voters in November, 2010
     Passed Senate again this year (35-15)
        Legislative Update—Local
          Government Reform
   Townships
       Advisory boards eliminated, and control shifted to county
       Anti-nepotism rules
   Counties
       Commissioners choose Single county exec or Board of
        Supervisors model
       Stronger county council
   Other
       Municipal and school board elections moved to fall in
        even numbered years
       Local government employees prohibited from serving on
        fiscal body of their employer
     Legislative Update—
  Automatic Taxpayer Refund
 Recognizes that there is a limit to the
  amount of money the state should collect
  from taxpayers
 Caps general fund reserve at 10% of
 Automatically refunds any excess to
 If this plan had been in place in the 90s,
  substantial money would have been
  returned to taxpayers (chart on next slide)
Taxpayer Refunds With 10%
           Legislative Update—
            Education Agenda
 Dollars in the Classroom
      Political subdivisions must consult at least 2
       purchasing cooperatives
      Document procurement decisions
      Subject to audit
 School Discipline
   Grants qualified immunity to teachers acting in

    good faith to restore discipline in the classroom
   If a student is removed from class, the parents,

    teacher, and principal must work together

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