Government Should Be Frugal, Too
July 28, 2016 at 4:25 p.m.
By Gary [email protected]
The main order of business will be for lawmakers to craft a budget compromise.
And as it looks so far, the debate could become a bit dicey.
Lawmakers couldn't agree on a spending plan during the legislature's regular session that ended April 29.[[In-content Ad]]In my view, that's a good thing. I'm glad they didn't get it done in the regular session. That's because if they had, we'd probably be in a world of funding hurt.
See, a new revenue forecast just came out and it was bleak. It basically shows that tax receipts over the next two years are going to drop a cool billion dollars below what was projected just a month ago.
So if lawmakers had passed a budget last month, based on the rosier projections, it likely would have plunged the state into deficit.
The reason the budget didn't pass - it made it through the Senate with minutes to go in the session but failed in the House - was because many Democrats thought it didn't spend enough while Republicans thought it spent too much. (Democrats have the majority in the House while Republicans control the Senate.)
After the budget failed to pass in the regular session - and because lots of GOP lawmakers were skeptical about the April revenue numbers - recession, remember - Gov. Mitch Daniels sought the May update.
According to the Indianapolis Star, "Fiscal analysts who make up Indiana's Revenue Forecast Technical Committee went back to the drawing board, and using new financial models based on more extensive data arrived" at the updated forecast.
The new forecast predicts tax receipts will drop $1.092 billion below April's projection. It breaks it down to $444.3 million less from June 30 to the end of the year, $331.7 million less in fiscal 2010 and $316 million less in fiscal 2011.
It's a lot more gloomy than the forecast from April. And that's pretty gloomy because the April forecast was $830 million below the previous one done in December.
Long story short - tax revenues are falling. This should come as no surprise to lawmakers. I mean, we are in a recession, after all.
Consider the fact that federal tax revenue plunged $138 billion in April against a year ago. It was the biggest year-to-year April drop - 34 percent - since 1981. When the economy drops, so does revenue. It's really pretty simple.
So Daniels will present his budget proposal Tuesday. In it will be how much each school corporation in the state can expect to receive.
This will be the starting point for lawmakers in the special session.
Expect a contentious debate.
Democrats, apparently having trouble grasping the reality of the situation, are questioning the new revenue forecast. (Their own financial analysts were on the panel that put out the numbers, but never mind.)
Here's what Rep. Scott Pelath, D-Michigan City, had to say:
"This is a great forecast for all the people that wanted to take a meat ax to education and job-creation efforts."
He's the second-ranking Demo on the House Ways and Means Committee.
He added, "Certainly, if you do the forecast enough times, you end up getting the answer that you want."
Does he think the governor and Republicans are happy about the gloomy forecast?
Bill Crawford, D-Indianapolis, is House Ways and Means chairman. He was warning against Republicans using the forecast to justify a "bunker mentality" with regard to spending.
I think a "bunker mentality" is exactly what the state - and local taxing units, for that matter - need right now.
We should be reigning in spending, not increasing it. Why is that such a tough concept to grasp?
The budget that failed called for increases in spending, including 3 percent over the next two years statewide for eduction. Even with federal stimulus money, it's not likely the budget can support that.
Sen. Luke Kenley, R-Noblesville, said the forecast likely means education will need to be flat-lined in 2010 with modest growth in 2011.
And I think that assessment might be a bit optimistic. There may actually have to be cuts in some education programs.
Democrats want to dip into the states $1.3 billion in savings to make sure there are no cuts in any education spending.
Seems to me the Democrats are on the wrong side of this argument. Nobody wants their favorite government program to be cut, I get that.
But millions of Americans are cutting back during these tough economic times. Why shouldn't some level of frugality apply to the government, too?
The main order of business will be for lawmakers to craft a budget compromise.
And as it looks so far, the debate could become a bit dicey.
Lawmakers couldn't agree on a spending plan during the legislature's regular session that ended April 29.[[In-content Ad]]In my view, that's a good thing. I'm glad they didn't get it done in the regular session. That's because if they had, we'd probably be in a world of funding hurt.
See, a new revenue forecast just came out and it was bleak. It basically shows that tax receipts over the next two years are going to drop a cool billion dollars below what was projected just a month ago.
So if lawmakers had passed a budget last month, based on the rosier projections, it likely would have plunged the state into deficit.
The reason the budget didn't pass - it made it through the Senate with minutes to go in the session but failed in the House - was because many Democrats thought it didn't spend enough while Republicans thought it spent too much. (Democrats have the majority in the House while Republicans control the Senate.)
After the budget failed to pass in the regular session - and because lots of GOP lawmakers were skeptical about the April revenue numbers - recession, remember - Gov. Mitch Daniels sought the May update.
According to the Indianapolis Star, "Fiscal analysts who make up Indiana's Revenue Forecast Technical Committee went back to the drawing board, and using new financial models based on more extensive data arrived" at the updated forecast.
The new forecast predicts tax receipts will drop $1.092 billion below April's projection. It breaks it down to $444.3 million less from June 30 to the end of the year, $331.7 million less in fiscal 2010 and $316 million less in fiscal 2011.
It's a lot more gloomy than the forecast from April. And that's pretty gloomy because the April forecast was $830 million below the previous one done in December.
Long story short - tax revenues are falling. This should come as no surprise to lawmakers. I mean, we are in a recession, after all.
Consider the fact that federal tax revenue plunged $138 billion in April against a year ago. It was the biggest year-to-year April drop - 34 percent - since 1981. When the economy drops, so does revenue. It's really pretty simple.
So Daniels will present his budget proposal Tuesday. In it will be how much each school corporation in the state can expect to receive.
This will be the starting point for lawmakers in the special session.
Expect a contentious debate.
Democrats, apparently having trouble grasping the reality of the situation, are questioning the new revenue forecast. (Their own financial analysts were on the panel that put out the numbers, but never mind.)
Here's what Rep. Scott Pelath, D-Michigan City, had to say:
"This is a great forecast for all the people that wanted to take a meat ax to education and job-creation efforts."
He's the second-ranking Demo on the House Ways and Means Committee.
He added, "Certainly, if you do the forecast enough times, you end up getting the answer that you want."
Does he think the governor and Republicans are happy about the gloomy forecast?
Bill Crawford, D-Indianapolis, is House Ways and Means chairman. He was warning against Republicans using the forecast to justify a "bunker mentality" with regard to spending.
I think a "bunker mentality" is exactly what the state - and local taxing units, for that matter - need right now.
We should be reigning in spending, not increasing it. Why is that such a tough concept to grasp?
The budget that failed called for increases in spending, including 3 percent over the next two years statewide for eduction. Even with federal stimulus money, it's not likely the budget can support that.
Sen. Luke Kenley, R-Noblesville, said the forecast likely means education will need to be flat-lined in 2010 with modest growth in 2011.
And I think that assessment might be a bit optimistic. There may actually have to be cuts in some education programs.
Democrats want to dip into the states $1.3 billion in savings to make sure there are no cuts in any education spending.
Seems to me the Democrats are on the wrong side of this argument. Nobody wants their favorite government program to be cut, I get that.
But millions of Americans are cutting back during these tough economic times. Why shouldn't some level of frugality apply to the government, too?
Have a news tip? Email [email protected] or Call/Text 360-922-3092