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Let’s Talk About Cuts

Indiana has $1 billion in annual road need.   The anti-tax crowd says don’t raises taxes, use existing budget dollars.  Ok, that’s fine, let’s see if we can take $1 billion out of the state budget.

According to State Budget Agency, Indiana spent $30 billion in fiscal year 2016.   Wow, that’s a lot of money, Abdul.  And $1 billion of that is only three percent, anyone can cut three percent of anything and do just fine.  Right?

Well, not really.  You have to breakdown that $30 billion because there’s some money you can use, and some money you can’t touch.

Out of that $30 billion, more than $12 billion is federal funding that goes to specific purposes so you can’t touch that.

So $30 billion – $12 billion = $18 billion.

Okay Abdul, we still have $18 billion to play with and $1 billion of $18 billion is five percent and you can still take five percent out of anything and survive just fine.

Not so fast!

Out of that $18 billion, you have to take out $3 billion in dedicated funds, these are dollars that must go to specific purposes because of they way they are raised, i.e. current gas taxes which go for the roads, environmental permit fees go to pay for the inspections. By the way, half that $3 billion goes to transportation.

So where are we now?

$18 billion – $3 billion = $15 billion.  Actually the number is $14,786,728,600.00, but who’s counting.*

Now let’s do some math.

$1 billion / $15 billion = 6% of the general operating fund.  So let’s start cutting that six percent and let’s do it across the board so it’s “fair”.

Education is the state’s biggest expenditure so let’s start there.  We spend about $9.7 billion on K-12 and higher ed, and six percent of that is $582,000,000 so schools, colleges and universities will take the biggest hit and we still have $418,000,000 to go.

Your next biggest expense is Health & Human Services (FSSA, Child Protective Services, drug treatment programs, etc.)  They come in at $3.1 billion and a six percent cut there would be $186,000,000.

$582,000,000 + $186,000,000 =  $768,000,000

So we we’ve cut money to schools, human services, programs help the truly needy and address  the heroin and opioid crisis in Indiana and we still have to find $232,000,000 to pay for roads. Don’t worry, we’ll get there.  I hope.

Your next biggest expenditure is public safety (State Police, Corrections, Homeland Security), that’s about $952,000,000 and six percent of that is $57,000,000, but what’s a few more rapists, murderers and child molesters running the streets, right?  Cutting six percent of general government functions (The Governor, Legislature, state agencies) gets you about $35,000,000.  Doing the same for disbursements, like those to local governments, gets you another $9.5 million.

So where are now?  $232,000,000 – $101,500,000  = $130,500,000.

We’re almost there, maybe

The next two items are the environment and economic development, they total about $164 million and a six percent cut there only gets you $9.8 million.

So we’re still short more than $120 million.

The only area left is the general funds in the transportation budget but it wouldn’t make any sense to cut six percent out of a budget that you’re going to put money back into.

So after cutting money to schools, public safety and services to the poor, children and disabilities, to pay for roads, we’re still short $120 million if we do across the board six percent cuts.

Hmm, maybe this isn’t as simple as some people would like for it to be.

*Using $14.7 billion as a starting number would actually mean 6.7% in cuts to general appropriations, I figured with as much heartburn six percent in cuts would do, there was no reason in making life worse for some of you.  And by the way, dipping into the nearly $2 billion reserves only pays for two years of road funding.

  • malercous

    Not that long ago IN had so much extra revenue Pence & Co wanted to give it back to the taxpayers. Are you saying that trickle-down economics doesn’t work? What about all those great tax paying jobs created by right-to-work? IN should be sitting good according to Republican orthodoxy. Maybe if taxes were cut a bit more things will be OK.