By Abrahm Hurt
INDIANAPOLIS—Indiana ended the current fiscal year with more money in its reserves than ever before: a whopping $2.27 billion.
Gov. Eric Holcomb, saying “Indiana’s economy is on a roll,” already knows how he wants to spend some of it.
Holcomb said he would like to get the green light from the legislature to use nearly $300 million of the reserves on one-time projects:
- $50 million to renovate the swine barns at the Indiana State Fairgrounds
- $78 million to eliminate all traffic signals and rail crossings on U.S. 31 from Indianapolis to South Bend
- $73 million for Purdue’s veterinary medicine teaching hospital
- $60 million for Ball State’s STEM and health professions facilities
- $30 million to replace Ivy Tech’s main building in Columbus.
Holcomb, in a statement, said he’s already spoken to legislative leaders. The Indiana General Assembly, which had already approved borrowing to proceed with the projects, would have to approve of paying for them with cash in the session that begins next January.
Gov. Eric Holcomb wants to use $300 million of the state’s record $2.27 billion in reserves for one-time capital projects.Photo by Bryan Wells, TheStatehouseFile.com
“Paying for capital projects now maintains Indiana’s low debt burden, avoids lease obligations over the next 25 years and leads to taxpayer savings of more than $100 million,” Holcomb said.
Democrats immediately leaped on Holcomb’s list for what it didn’t include: a teacher pay increase. On Twitter, the Indiana Democratic Party said Holcomb’s priorities were a barn for hogs, not pay for teachers.
State Rep. Greg Porter, the Indianapolis Democrat who is the ranking minority member on the budget-writing House Ways and Means Committee, said in a statement that the new two-year budget was passed in April, Republicans were predicting a shortfall of close to $100 million. Instead, fiscal year 2019 ended with a $410 million surplus.
“I think that they should be ashamed and embarrassed that they prize hoarding money over improving human infrastructure. So now that we do have more funding, is it OK to spend some money now? Can we give teachers in Indiana a 5 percent pay raise?” Porter said, citing that hot-button issue along with several other areas that Democrats prioritized in the last legislative session.
Porter said that Republicans top priority is “maintaining a huge surplus.” The current surplus is the highest since 2015-16, though in the mid-1990s surpluses were a larger percentage of operating expenses.
At a news conference Thursday, State Auditor Tera Klutz and Cris Johnston, who took over as director of the Office of Management and Budget on July 1, argued the state is being prudent by maintaining reserves that amount to 13.9 percent of general fund expenditures.
Budget Director, Cris Johnston, gives the 2019 fiscal year-end report Thursday at the Statehouse. Photo by LaMonte Richardson, TheStatehouseFile.com
Klutz touted Indiana’s AAA credit rating, and Johnston noted that “you never know when the next recession is gonna come.”
Asked why such things teacher pay wasn’t on the governor’s list of uses for the reserves, Johnston said “those are ongoing needs” that represent long-term financial commitments rather than “one-and-done” expenditures.
But by paying cash to avoid interest payments on loans, he said, “it adds that capacity to do some of those things.”
House Speaker Brian Bosma, R-Indianapolis, said he supports the governor’s recommendation to use reserves for the capital projects to void debt financing. So, too, did Senate Appropriations Chairman Ryan Mishler, R-Bremen, who called it “a responsible move to free up money in the long-term.”
Abrahm Hurt is a reporter for TheStatehouseFile.com, a news website powered by Franklin College journalists.