This responsible fiscal discipline was needed since the federal stimulus dollars will disappear in the next budget cycle. In fact, 35 states raised taxes this year to cover their loss of income; however Indiana was one of the few who did not. "This news of Indiana's fiscal responsibility is great news for taxpayers," said Rep. Tom Dermody (R-LaPorte). "This shows that taxpayers have been in the front of the minds of the Governor and other fiscal leaders, and that is key to Indiana's fiscal success. We know we cannot raise taxes at this tough economic time and the balance in our savings account shows our team's commitment to fiscal responsibility."
Income vs. Expenses
Essentially that is what has happened to Indiana. Due to the recession, revenue (or income) has been down. The state was able to trim some of its expenditures however Indiana still needs to dip into their savings account to cover the difference. Other states have had to raise taxes in order to cover the difference.
Not Behaving like Washington, DC
According to an article released by the Associated Press today, China is the largest foreign holder of Treasury securities. Now concerns are being raised that China could begin to shift money away from Treasury securities. It is expected that the shift could raise the cost of financing America's soaring budget deficits.
Indiana, a Cut Above
The amount in Indiana's savings does not mean that we are in the clear. Indiana will have to continue to be fiscally in order to prevent a general tax increase. Just like any Hoosier household - Indiana, too, must live within its means.
Rep. Dermody serves House District 20, which includes parts of LaPorte and Pulaski Counties.