INDIANAPOLIS (AP) — Gov. Mike Pence is selling the state
plane and asking agencies to cut spending as Indiana deals with a surprise
$141 million budget shortfall, he said Monday.
State agencies will have to cut their budgets an additional 1.5 percent
and state universities will see aid clipped by 2 percent because of the
unexpected drop in tax collections over the first five months of fiscal
year 2014. Pence said the moves should save the state about $57 million.
"Fiscal integrity is the foundation of prosperity," Pence said in a
statement. "The cost-saving measures we are implementing today will ensure
that Indiana remains fiscally sound during these uncertain times."
The shortfall is marginal compared to the state's relative fiscal footing.
Pence and Republican lawmakers approved the budget earlier this year that
withheld large increases in spending to pay for a round of tax cuts and
maintain roughly $2 billion in cash reserves.
Pence retained former Gov. Mitch Daniels' practice of cutting most agency
budgets by 3 percent each year, and will tack another 1.5 percent cut on
top to save $25 million.
The state's higher education budget already is being cut by 2 percent, or
$26.5 million, but a Pence spokeswoman noted Monday that universities
received a 5.4 percent spending increase in the latest budget.
Pence also expects to make $2.5 million in selling the state plane, a 2000
King Air B200, that was largely used for travel by the governor and top
The shortfall comes as Indiana appeals the loss of roughly $63 million a
year in tobacco settlement money — one a handful of states to lose a
portion of the 1998 settlement proceeds for not doing enough to collect
funds from some tobacco companies.