INDIANAPOLIS (AP) -
Indiana’s public universities could see their budgets cut another 2 percent
if state tax collections continue lagging behind expectations, Gov. Mike
Pence’s budget director said Thursday.
Brian Bailey told members of the State Budget Committee that tax collections
actually fell between 2013 and 2014. He says that unless they meet
expectations for 2015, universities will have to cut roughly $27.5 million.
Bailey says the
state’s universities will still see a net increase in funding because of
spending approved in the state’s 2014-15 budget.
Cuts to the state
budget made by the governor have continued as Indiana’s economy slowly
improves. Pence sold the state plane last year and cut various agencies
after learning that tax collections were failing. The state’s tax
collections during the 2014 budget year, which ended in June, came in
slightly less than what the state collected in 2013.
“We are concerned
that fiscal year 2014 did not exceed prior year collections,” Bailey said.
alerted state agencies at the start of this current year to plan on
withholding 3 percent of their budget again in 2015. But Bailey noted that
the state’s K-12 education system has been spared those cuts.
Appropriations Chairman Luke Kenley, R-Noblesville, led about a half hour of
questioning of Pence’s budget director Thursday. He said he was concerned
that cuts in higher education would contribute to further tuition increases.
Rep. Terry Goodin,
D-Crothersville, pointed out that the state’s cash reserves - roughly $2
billion, or 13.7 percent of the amount the state spends each year - would be
more than enough to trigger the state’s automatic tax refund. Democratic
lawmakers accused the previous administration of gutting services in order
to trigger the politically popular tax refund.
“It sounds like
we’re setting up another automatic tax refund,” he said.
Goodin’s question and others will be important as lawmakers work up their
next two-year budget during the coming session. Lawmakers meet in January
for their “long session", which will almost certainly be dominated by budget
Pence has been
laying the groundwork for changes in the state’s tax code, though it remains
unclear how much he will push for during the 2015 session.
The budget cuts -
also called “reversions” - are central to a lawsuit filed by adoptive
families alleging the state shorted them payments. The families argue that
roughly $240 million was cut from the Department of Child Services and used
to replenish the state’s cash reserves, while not paying them. However,
Pence announced this week that the families would be paid the subsidies for
Kenley asked budget
committee members Thursday not to discuss the issue because the lawsuit is