Indiana State Reserves History

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The biggest state revenue forecast "miss" was the 9.6% shortfall for Fiscal Year 2010 (during the depths of the Great Recession) as shown by the Indiana State Revenue Forecasts History compiled at http://www.finplaneducation.net/revenue_forecasts_history.htm. Therefore, total state reserves equal to 10% of forecasted state General Fund revenue are prudently sufficient to meet reasonably anticipated Fiscal Year emergency needs.

The sufficiency of total state reserves equal to 10% of forecasted Fiscal Year state General Fund revenue to meet the state’s reasonably anticipated emergency needs is enhanced by the Governor’s reversion authority, which has been in place seventy years and is commonly used to maintain balanced state budgets. The Governor is empowered by his reversion authority to not spend state General Fund budgeted amounts if there are unanticipated revenue shortfalls. For example, Governor Mitch Daniels adroitly used his reversion authority during the depths of the Great Recession to responsibly conduct the state’s business.

The table below presents the Indiana State Reserves History for Fiscal Years 2004 through 2017. Total state reserves for a Fiscal Year include the Combined Reserves of the (a) June 30 General Fund Reserve Balance, (b) Medicaid Reserve, (c) State Tuition Reserve, and (d) Rainy Day Fund. (NOTE: The "Rainy Day Fund" is the Counter-Cyclical Revenue and Economic Stabilization Fund that was established by Indiana Code 4-10-18 in 1982 “to assist in stabilizing revenue during periods of economic recession” - cash in this non-reverting Fund may be combined by the State Treasurer with other amounts in the state treasury for the purposes of cash management.)

The latest state General Fund revenue forecast update prior to the current Fiscal Year 2017 totaled $15.3434 billion. Therefore, using 10% of the state General Fund revenue forecast as a guideline for prudent reserves, state reserves totaling $1.53434 billion would be sufficient to meet reasonably anticipated emergency needs during the Fiscal Year 2017. The table below shows that the estimated Total Combined Reserves for Fiscal Year 2017 is $1.73060 billion. Therefore, the current Fiscal Year 2017 state reserves are $196.3 million more than what is needed to prudently meet the state's reasonably anticipated emergency needs.

As shown by the Indiana State Revenue Forecasts History compiled at http://www.finplaneducation.net/revenue_forecasts_history.htm, the latest state General Fund revenues forecasted for Fiscal Years 2017, 2018, and 2019 WITHOUT NEW TAX AND FEE INCREASES are $15.1673 billion, $15.5882 billion, and $16.1808 billion respectively. Using 10% of the revenue forecast as a guideline for prudent reserves, Fiscal Year 2018 cash reserves should total $1.55882 billion and Fiscal Year 2019 cash reserves should total $1.61808 billion.

Reducing the state's Fiscal Year 2017 total cash reserves of $1.73060 billion to the prudent Fiscal Year 2018 total state cash reserves of $1.55882 billion would free up $171.8 million for new spending in Fiscal Year 2018. Including the $171.8 million from reduced cash reserves with the $420.9 million increase in forecasted total revenue WITHOUT NEW TAX AND FEE INCREASES results in $592.7 million available for new state General Fund spending in Fiscal Year 2018.

Increasing the state's Fiscal Year 2018 total cash reserves of $1.55882 billion to the prudent Fiscal Year 2019 total state cash reserves of $1.61808 billion would reduce new spending in Fiscal Year 2019 by $59.3 million. Subtracting the $59.3 million in increased cash reserves from the $622.0 million increase in forecasted total revenue WITHOUT NEW TAX AND FEE INCREASES results in $562.7 million available for new state General Fund spending in Fiscal Year 2019.

Indiana State Reserves History By Fiscal Year
General Fund and Property Tax Relief Fund
Combined Statement of Actual Unappropriated Reserve
(Millions of Dollars)
(Compiled February 2, 2017)

SOURCES:
A. FY 2004-2016 Handbooks from http://iga.in.gov/legislative/2016/publications/handbooks/
B. FY 2017 from http://www.in.gov/sba/files/AS_2017_Combined_Surplus_Statement.pdf

	FY 2021	FY 2020	FY 2019	FY 2018	FY 2017	FY 2016
July 1 General Fund Beginning Balance					776.3	887.0
Current Year Resources					15,264.7	15,057.6
Appropriations & Expenditures					(16,129.1)	(15,353.7)
Reversions					346.6	185.5
a. June 30 General Fund Reserve Balance					258.5	776.3
b. Medicaid Reserve					577.6	577.6
c. State Tuition Reserve					346.7	345.9
d. Rainy Day Fund					547.7	544.6
TOTAL Combined Reserves (a+b+c+d)					1,730.6	2,244.5
TOTAL as Percent of Operating Revenue					11.3%	14.9%
TOTAL as % of Next Year Appropriations					11.0%	14.2%

	FY 2015	FY 2014	FY 2013	FY 2012	FY 2011	FY 2010
July 1 General Fund Beginning Balance	1,036.4	1,428.0	1,803.4	1,124.3	830.7	54.9
Current Year Resources	15,159.9	14,659.9	14,789.8	14,257.7	13,330.7	13,690.8
Appropriations & Expenditures	(15,481.1)	(15,239.8)	(15,349.6)	(13,894.6)	(14,100.1)	(13,699.7)
Reversions	171.9	188.1	184.3	316.0	1,063.0	784.7
a. June 30 General Fund Reserve Balance	887.0	1,036.4	1,428.0	1,803.4	1,124.3	830.7
b. Medicaid Reserve	577.6	445.0	145.0	0.0	0.0	0.0
c. State Tuition Reserve	300.0	150.0	0.0	0.0	0.0	0.0
d. Rainy Day Fund	376.6	373.9	370.1	351.6	57.2	0.0
TOTAL Combined Reserves (a+b+c+d)	2,141.2	2,005.3	1,943.1	2,155.0	1,181.5	830.7
TOTAL as Percent of Operating Revenue	14.1%	13.7%	13.1%	15.1%	8.9%	6.1%
TOTAL as % of Next Year Appropriations	13.9%	13.3%	13.1%	15.1%	8.5%	5.9%

	FY 2009	FY 2008	FY 2007	FY 2006	FY 2005	FY 2004
July 1 General Fund Beginning Balance	592.5	537.2	410.7	118.8	0.2	136.6
Current Year Resources	13,051.6	13,233.0	12,704.4	12,434.1	11,646.6	11,107.4
Appropriations & Expenditures	(14,473.3)	(13,310.5)	(12,696.5)	(12,266.4)	(11,750.0)	(11,308.2)
Reversions	1,414.2	132.8	118.6	124.9	222.0	63.4
a. June 30 General Fund Reserve Balance	54.9	592.5	537.2	410.6	118.8	0.2
b. Medicaid Reserve	57.6	57.6	87.6	34.0	24.0
c. State Tuition Reserve	941.7	400.0	316.6	316.6	290.5	290.5
d. Rainy Day Fund	365.2	363.0	344.3	328.1	316.5	242.2
TOTAL Combined Reserves (a+b+c+d)	1,419.4	1,413.1	1,285.7	1,089.3	749.8	532.8
TOTAL as Percent of Operating Revenue	10.2%	10.5%	10.1%	9.0%	6.5%	5.0%
TOTAL as % of Next Year Appropriations	10.3%

Notes:
(1) FY 2010 Percentages are net of a PTRF and Homestead Credit Liability of $600,000.
(2) FY 2009 Percentages are net of a PTRF and Homestead Credit Liability of $90.0 million.
(3) FY 2008 Percentages are net of a Payment Delay Liability of $31.1 million.
(4) FY 2006 June 30 General Fund Reserve Balance is net of an Adjustment to Auditor of $800,000.
(5) FY 2004 June 30 General Fund Reserve Balance is net of Payment Delays totaling $2.8 million.

This page was last updated on 05/04/17.