INDIANAPOLIS (AP) -
Indiana’s state cash reserves grew faster than expected over the past year,
to nearly $2.3 billion, and the governor is proposing to spend some of that
money on several planned construction projects.
officials announced Thursday that Indiana closed the 2019 fiscal year ending
June 30 with $485 million more in reserves than a year ago - and about $200
million more than officials anticipated in April. Much of that is attributed
to a jump of $835 million, or 5.4%, in state tax revenue from last year.
Eric Holcomb is recommending that $300 million go toward projects, including
$78 million of upgrades eliminating traffic signals and railroad crossings
on U.S. 31 in northern Indiana. Others involve construction of a new
veterinary hospital at Purdue University and building projects at the
Indiana State Fairgrounds, Ball State University and Ivy Tech State College
Management and Budget Director Cristopher Johnston, Holcomb’s top fiscal
adviser, said that would avoid possibly $100 million in interest costs from
borrowing money for the projects, which legislators approved earlier this
and Senate leaders issued statements supporting the plan, which would need
legislative approval during next year’s session.
Republican legislators made preserving a sizable cash reserve a priority in
developing the new two-year state budget adopted in April. They aimed to
keep a $2 billion reserve, or about 11.5% of expected state spending. They
argue that would protect the state in case of an economic recession and
maintain its top-level AAA credit rating.
The 2019 budget
year ended with a 13.9% reserve, which would drop to about 12.1% with
Holcomb’s spending proposal.
Holcomb and the GOP-dominated Legislature for earlier projecting revenue
drops and not directing more money toward needs such as increasing teacher
pay, expanding the state-funded preschool program and making sure the
troubled Department of Child Services can keep hundreds of new caseworkers.
“I think that they
should be ashamed and embarrassed that they prize hoarding money over
improving human infrastructure,” said Rep. Greg Porter of Indianapolis, the
top Democrat on the budget-writing House Ways and Means Committee.
Johnston said such
spending plans would represent ongoing expenses rather than the one-time
outlays in Holcomb’s construction project proposal. Johnston argued it would
save up millions in annual interest costs over at least the next 20 years.
spending the money, but for future years it is freeing up capacity for those
other needs,” Johnston said.