Taxpayer Friendly Budget Template 2009-2011

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Watchdog Indiana proposes a Template for a 2009-2011 Taxpayer Friendly Budget. This Template provides resources for good government while focusing on the state and local tax burden of Hoosier working families. Below is a spreadsheet summarizing the Watchdog Indiana Taxpayer Friendly 2009-2011 Budget Template.

First of all, the Taxpayer Friendly 2009-2011 Budget Template covers both the 2010 and 2011 fiscal years. A two-year budget provides the fiscal discipline needed to help protect Hoosier working families from the unneeded tax increases that single-interest lobbyists would demand each year if one-year budgets were unwisely adopted.

The Taxpayer Friendly Budget Template uses $2.2371 billion in federal stimulus funds to supplement the anticipated State General Fund recurring revenue of $40.8208 billion in the 2009, 2010, and 2011 fiscal years. Non-recurring federal stimulus funds are used to pay for $1.8397 billion recurring appropriations in the 2009-2011 fiscal years. Using non-recurring resources to pay for recurring appropriations creates a June 30, 2011, structural deficit of $772.3 million.

The Template leaves a reserves balance of $1.2188 billion to help avoid 2012-2013 tax increases created by the structural deficit. If revenue collections from current tax sources do not increase in line with historical levels, the state's reserves and spending discretion by the Governor must be used to avoid future tax increases. The state's reserves in the 2009-2011 budget need to be at least 50% more than the structural deficit.

The 2010 and 2011 fiscal year base appropriations in the version of the budget passed by the State Senate on April 14 are maintained with two exceptions. The K-12 Tuition Support level in the Senate budget is decreased one percent both years, and Higher Education is decreased one-half percent both years. Base appropriations in the April 14 Senate budget are lowered a total of $147.1 million.

The average K-12 teacher in Indiana has a $49,569 salary with full benefits. Teachers, like other government employees, should forego pay increases during the current recession when so many other Hoosiers are experiencing income reductions and job losses. The same can be said for professors in our colleges that receive public support.

The initials of Governor Mitch Daniels name must come to mean Mighty Determined instead of Mister Disengaged when it comes to supporting the constitutional property tax caps in Senate Joint Resolution 1. The General Assembly proponents of such non-budget initiatives as a Marion County Capital Improvements Board bailout, the relocation of a Gary casino, and expanded gambling have not been bashful about their intentions to hold the budget hostage to get what they want. Governor Daniels needs to be equally adamant to get an SJR 1 vote in the Indiana House in return for any other non-budget special session initiative.

Governor Daniels wants to earn a prominent role in the national debate with his efforts at fiscal restraint in the 2009-2011 budget. His national voice will be muted if he becomes identified with another failed use of a state sales tax increase to provide property tax relief. Governor Daniels must provide special session LEADERSHIP to get constitutional property tax caps passed by the House so We The People can vote in 2010 for permanent property tax relief. Temporary fiscal restraint is of limited benefit to working families without permanent property tax relief.

2009-2011 Taxpayer Friendly State General Fund Budget
Watchdog Indiana Template
(May 15, 2009)

Source Documents and Assumptions:
(1) April 8, 2009, Combined Statement prepared by the Senate Republican Fiscal Staff
(2) April 9, 2009, Senate Appropriations Committee Summary of Amendment #8 to HB 1001
(3) April 17, 2009, Total State General Fund Revenue and Medicaid Forecasts
(4) April 26, 2009, FY 2009 Revenue Forecast Reduction of $406 million from State Budget Deputy Director


Combined Statement of Estimated Balances and Reserves
(millions of dollars)

Resources, Appropriations, Expenditures, Reversions	FY 2009	FY 2010	FY 2011

(a) Working General Fund Balance on July 1	592.5	472.1	378.4
(b) Forecast Revenue December, 2008	13,516.3	13,821.2	14,321.9
(c) Forecast Reduction April 17, 2009	(139.9)	(345.9)	(345.6)
(d) Additional Forecast Reduction April 26, 2009	(266.1)	0.0	0.0
(e) Federal Revenue Sharing Poverty Hospitals (DSH)	67.0	67.0	67.0
(f) Quality Assessment Fee	18.0	20.1	19.8
(g) Federal Stimulus General Purpose Funds	0.0	91.5	91.5
(h) Federal Stimulus K-12 and Higher Ed. Operating Funds	225.0	292.0	306.0
(i) Federal Stimulus Medicaid Funds	0.0	240.5	289.2
(j) Federal Stimulus Higher Education Capital Projects Funds	177.4	110.0	110.0
(k) Outside Bills - 2009 Session	(6.7)	(13.1)	(6.7)
(l) Marion County Juvenile Arrearage	15.0	0.0	0.0
(m) Quality Assessment Fee due increased FMAP	0.0	20.0	10.0
(n) Base Operating Appropriations	(14,287.7)	(13,546.2)	(13,951.4)
(o) Restore K-12 and Higher Education Cuts to FY 2009 Levels	(201.0)	(224.0)	(230.0)
(p) Offset Property Tax Cap Losses for K-12 Schools	(24.0)	(68.0)	(76.0)
(q) Medicaid Forecast Increase April17, 2009	0.0	(55.4)	(76.6)
(r) Medicaid Spending using Federal Stimulus Funds	0.0	(240.5)	(289.2)
(s) Base Capital Appropriations	(267.8)	(209.9)	(225.4)
(t) Higher Ed. Capital Projects using Federal Stimulus Funds	(177.4)	(110.0)	(110.0)
(u) Base Reversions	25.0	25.0	25.0
(v) Additional Reversions	736.4	0.0	0.0
(w) Adjust CB Relief for K-12	25.0	0.0	0.0
(x) Reduce Medicaid for Federal Stimulus	304.0	0.0	0.0
(y) Adjust for New School Formula	126.1	0.0	0.0
(z) Judgements and Other Miscellaneous Adjustments	15.0	32.0	34.0
(aa) Ending General Fund Balance on June 30	472.1	378.4	341.9
(bb) Medicaid Reserve	57.6	57.6	57.6
(cc) Tution Reserve	408.0	415.1	429.6
(dd) Rainy Day Fund	370.2	376.6	389.7
(ee) Total Combined Balances	1,307.9	1,227.7	1,218.8


June 30, 2011, Structural Deficit
(millions of dollars)

DEDUCT: FY 2011 (a) less FY2011 (aa) General Fund Balance	(36.5)
DEDUCT: FY 2011 Fed. Stimulus General Purpose Spending *	(96.3)
DEDUCT: FY 11 Fed. Stim. K-12 and Higher Ed. Oper. Spending *	(306.0)
DEDUCT: FY 2011 Federal Stimulus Medicaid Spending *	(289.2)
DEDUCT: FY 2011 Outside Bills - 2009 Session *	(6.7)
DEDUCT: FY 11 Quality Assessment Fee due increased FMAP *	(10.0)
DEDUCT: FY 2011 (cc) less FY 2010 (cc) Tuition Reserve	(14.5)
DEDUCT: FY 2011 (dd) less FY 2010 (dd) Rainy Day Fund	(13.1)
Structural Deficit	(772.3)

* Non-Recurring Resources that are used for Recurring Appropriations


General Fund Base Operations Appropriations Budget Summary
(dollars)

Functional Category		FY 2010	FY 2011

General Government		506,702,401	548,078,229
Corrections		678,559,581	696,513,615
Other Public Safety		117,528,686	117,528,686
Conservation and Environment		85,716,798	85,711,798
Economic Development		88,651,194	88,651,194
Mental Health		270,271,979	270,344,557
Public Health		73,230,226	63,536,431
Medicaid		1,290,521,432	1,551,715,051
Family and Children		147,656,413	147,656,413
Social Services and Veterans		911,718,462	911,723,126
Higher Education **		1,811,259,103	1,833,175,583
Education Administration		15,739,554	15,739,554
Tuition Support ***		6,317,833,500	6,432,673,500
Social Security - Teachers		2,403,792	2,403,792
Teachers Retirement		687,306,248	714,798,497
Other Local Schools		273,227,932	273,227,932
Other Education		10,108,228	10,108,228
Distributions		257,780,902	187,780,902
TOTAL Base Operations Appropriations		13,546,216,431	13,951,367,088

** Higher Education appropriations decreased 0.5% from 04/09/2009 Senate Appropriations Committee Summary
*** Tuition Support appropriations decreased 1% from 04/09/2009 Senate Appropriations Committee Summary

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This page was last updated on 03/19/10 .