[r85] Pond Report: House Committee Passes Balanced Budget With No Tax Increases (2/24/2011)

Thursday, February 24, 2011

Start Date: 2/24/2011 All Day
End Date: 2/24/2011
It is a simple concept: do not spend more than you have.

Every Hoosier family and business lives by this concept. It is what is expected of responsible U.S. citizens, even during the difficult economical times Hoosiers are currently experiencing.

This is also the concept brought to Statehouse during this session of the General Assembly.
The House Ways and Means Committee has approved House Bill 1001that would establish a two-year $28 billion state budget without any tax increases for Hoosiers.

Every two years the General Assembly is required to pass a state budget. It is the one of the constitutional requirements of the General Assembly - and it is a gigantic task that no one in the Statehouse takes lightly.

As a member of the Ways and Means Committee, I have worked almost every day this session to help create the budget.

A state budget is not something done in one day or even one week, but is a long process requiring months of testimony hearings from various government agencies and interest groups so we can create a fair budget for all Hoosier taxpayers.

Gov. Mitch Daniels said in his State of the State address in January that we needed to create a balanced budget without increasing taxes. For every extra dollar we wanted to spend in a certain area, we had to find a dollar in another area to cut.

Other states have pawned their state's financial problems on the taxpayers. The Illinois state legislator in January increased state income tax by 67 percent to deal with its financial deficit.

Creating a balanced budget with no taxes increases was the committee's guiding principle through this budget process. This required several difficult choices, but they are no different than the difficult choices every Hoosier family faces in these challenging economical times.

Funding education was one of the top priorities of the Ways and Means Committee.

The proposed budget, House Bill 1001, maintains the current level of funding for K-12 schools for 2012 and 2013. In addition, K-12 education would comprise 47 percent of the state's $28 billion budget - the most money in the budget allotted for one area.

Part of this education money would go to fund the Indiana Department of Education's grant programs, including full-day kindergarten and textbook reimbursements. It also would change the distribution formulas for schools to more accurately fund schools based on enrollment. The state will no longer fund "ghost students" who have moved school districts. State assistance to schools will follow the child in the new funding formula.

Along with K-12 education, Medicaid received the second largest portion of the budget at 13 percent and funding for state colleges and universities received the third largest portion at 12 percent.

State agencies will experience the greatest cuts in this budget proposal.

Most agencies would receive 15 percent less than they received during the 2010-11 fiscal year. However, three areas not receiving a funding decrease are Medicaid, the Indiana Comprehensive Health Insurance Association and Pensions.

This two-year budget also sets up Indiana for long-term financial stability.

The proposed Indiana budget is projected to create a $38 million surplus for the state by 2013. In contrast, 24 states are already anticipating budget deficits in 2013 totaling more than $66 billion, according to the National Conference of State Legislators.

The House committee approving the budget was not the final step to creating this budget. The Indiana House of Representatives and then the Indiana Senate will need to approve HB 1001 for it to become the state's budget for the next two-years, and it is possible there could be some changes to the bill.

However, the underlying principle of not increase taxes is something we will uphold throughout the rest of this process.


State Rep. Phyllis Pond (R-New Haven) represents portions of Allen and DeKalb counties.