Rep. Culver: Indiana Head and Shoulders Above Other States
STATEHOUSE - Over the past several years the State of Indiana successfully executed fiscal responsibility with taxpayer's hard earned dollars. Today the announcement was made that Indiana has $830 million in their savings account. This reserve money was able to be saved by reigning in state spending.
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. "Unlike most states, Indiana has demonstrated proactive fiscal management to keep us out of a financial crisis. It hasn't been easy, but the alternative would have been much more painful. Our fiscal management has caught the attention of the nation on how government should live within its means," said Rep. Wes Culver (R-Goshen).
Income vs. Expenses
This is an issue of income vs. expenditures, something that every household takes into consideration. For example, a family has $1,500 in monthly income and $2,000 in monthly expenses. Their options are to reduce spending, pull money out of their savings to cover the gap, or to borrow money that they would eventually have to pay back at a higher rate. Unfortunately, spending down savings is their temporary solution.
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.
Indiana, a Cut Above
Indiana is one of 15 states that did not raise taxes. There are two fundamental items wrong with raising taxes in an economy like this: families are unable to afford a tax increase and it harms job creation and economic development.
The amount in Indiana's savings does not mean that we are in the clear. Indiana will have to continue to be fiscally responsible order to prevent a general tax increase. Just like any Hoosier household - Indiana, too, must live within its means.