Spending cuts to many state agencies during the past year helped Indiana's state government cash reserves grow to more than $2.1 billion, even as tax collections increased more slowly than expected, officials announced Thursday.
Figures released by Republican state Auditor Suzanne Crouch show Indiana had a $210 million surplus during the budget year that ended June 30. That boosted the total state reserves to a level about 10 percent higher than when the two-year state budget period began in July 2013.
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Republican Gov. Mike Pence said maintaining the state's cash reserve gives it a cushion against needing tax increases during an economic downturn and protects its high AAA bond rating with credit agencies.
"I believe this reserve represents a critically important foundation for our state going forward," Pence said.
State tax collections for the past year were about $80 million less than projected when the two-year state budget was approved by legislators in 2013.
Pence ordered spending cuts by state agencies that amounted to about $133 million over the last year. That included nearly $38 million, or about 5 percent, from the Family and Social Services Administration. It also included $6 million, or 15 percent, from the Bureau of Motor Vehicles, which has faced lawsuits over some $60 million in overcharges during recent years. An independent audit found it lacked proper oversight.
Rep. Gregory Porter of Indianapolis, the top Democrat on the House Ways and Means Committee, said the Pence administration was essentially hoarding money that could be spent on avoiding funding cuts to school districts and giving local governments the cash for needed road repairs.
"What continues to stand out about these yearly announcements is the absolute lack of ambition our Republican leadership shows in anything except squirrelling your tax dollars away," Porter said in a statement. "There are serious problems facing our state, and yet we toss those concerns aside to gloat over a magic figure of $2 billion."
Pence said he would remain cautious even though the reserve has grown to 14.1 percent of state spending — topping what he called the "objective" of having 12.5 percent reserves.
The governor said he has directed most state agencies to withhold 3 percent of the funding levels approved by the Legislature for the coming year, while pointing out that a few critical agencies, such as the Department of Child Services, were excluded from that order.
Such actions are prudent, Pence said, while he continues to worry about the strength of the national economy.
"We always want to encourage our agencies to look for greater efficiencies, to look for savings," he said.