State Auditor Visits Warsaw, Decries State's Fiscal Condition
July 28, 2016 at 4:25 p.m.
When push comes to shove, Indiana State Auditor Connie Nash will be able to say, "I told you so."
The shoving is due to begin fairly soon, according to the former Huntingburg mayor. She doubts that schools, universities and local governments will receive spring 2002 revenue payments.
"They"ll probably have to borrow to continue operation," she said.
Nass isn't pulling any punches and wants citizens to know state government is virtually broke.
The surplus is dramatically reduced from last year, equaling only half of the previous year's surplus ($808 million), just a fraction of the $2 billion enjoyed in 1999.
Without $101 million in appropriations from various state agencies added by the Legislature "in the dead of night," the state would have a negative cash balance this year.
For the last two years Nass has presented "A Report To Indiana Citizens on the State's Finances" that explains in graphics and simple language where all the money has gone.
"It's just a lot of spending," she said. "Like many Americans when they had a lot of money, the Legislature decided to spend it instead of returning the money to the taxpayers."
Kosciusko County Auditor Sue Ann Mitchell attended the Thursday meeting with Nass. Mitchell has routinely warned the county council and commissioners to tighten their budgetary belts.
"Connie has been on this bandwagon for a long time," Mitchell said of the state auditor's warning.
The women meet on a fairly frequent basis along with county auditors and clerk-treasurers to stay informed about the state's finances.
Nass contends that O'Bannon and Kernan were well aware of the shortfall during the recent gubernatorial race.
"They did know, they had to know," she said. "It just wasn't mentioned."
To make the bottom line appear black, the Medicaid reserve has been added to the June 20, 2001, surplus as well as the reserve for tuition support.
Nass frowns on labeling funds held in reserve as a surplus. She also said the current Medicare reserve is not enough to cover costs through 2003 at the rate being paid now.
One of the agency revisions used to fluff up the surplus was an $11.4-million item set aside to transfer the disabled and aging from the state-run Muskatuck facility to other facilities.
"The governor ordered that Muskatuck be closed," she said. "Now there is no money to move the residents."
Another thing both auditors frown upon is the use of $375 million in gaming revenues going to the general fund. Gambling, they said, is never a sure source of revenue and isn't stable enough to be used to support the general fund.
The latest "Report To Indiana's Citizens" includes a chart showing how gaming monies are spent.
Nass said after legislators peel off $310.9 million in gambling revenue for state projects and special projects, $236.2 million will be distributed to counties to replace motor vehicle excise tax losses.
"The promise of 50 percent of gaming proceeds going to cities, towns and schools has never been met," Nass said.
Hoosier Lottery money also goes to the Pension Relief Fund and the Teacher's Retirement Fund before going to the Build Indiana Fund.
Nass said 25 percent of the Riverboat Wagering Tax goes for the gaming commission's administrative costs and props up the horse racing parimutuel system.
Mitchell said taxpayers have recently been lulled into a false sense of security by the personal property tax replacement credit. More than $375 million has been spent over the last two years to relieve citizens of this burden.
This spring, though, the full tax will be collected. And, if anyone failed to file a personal property tax claim for the last two years, they will be further assessed a $25 fee for each year.
The list of expected shortages goes on and on, Nass said.
"It's more than a fiscal crisis," she said. "It's a fiscal mismanagement crisis. It's a lack of leadership and inability to make a decision. The governor neither vetoed nor signed a budget bill. He just let it ride."
The current budget spends $500 million more than projected revenues and Nass said the September report is going to show there is $125 million less than projected.
The report is available to anyone who requests a copy by writing the auditor's office, 240 State House, 200 W. Washington St., Indianapolis IN 46204-2793, or by calling 317-232-3300.
Detailed financial statements and data are presented in the State's Comprehensive Annual Financial Report, which is available on the auditor's Web site, www.state.in.us/auditor [[In-content Ad]]
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When push comes to shove, Indiana State Auditor Connie Nash will be able to say, "I told you so."
The shoving is due to begin fairly soon, according to the former Huntingburg mayor. She doubts that schools, universities and local governments will receive spring 2002 revenue payments.
"They"ll probably have to borrow to continue operation," she said.
Nass isn't pulling any punches and wants citizens to know state government is virtually broke.
The surplus is dramatically reduced from last year, equaling only half of the previous year's surplus ($808 million), just a fraction of the $2 billion enjoyed in 1999.
Without $101 million in appropriations from various state agencies added by the Legislature "in the dead of night," the state would have a negative cash balance this year.
For the last two years Nass has presented "A Report To Indiana Citizens on the State's Finances" that explains in graphics and simple language where all the money has gone.
"It's just a lot of spending," she said. "Like many Americans when they had a lot of money, the Legislature decided to spend it instead of returning the money to the taxpayers."
Kosciusko County Auditor Sue Ann Mitchell attended the Thursday meeting with Nass. Mitchell has routinely warned the county council and commissioners to tighten their budgetary belts.
"Connie has been on this bandwagon for a long time," Mitchell said of the state auditor's warning.
The women meet on a fairly frequent basis along with county auditors and clerk-treasurers to stay informed about the state's finances.
Nass contends that O'Bannon and Kernan were well aware of the shortfall during the recent gubernatorial race.
"They did know, they had to know," she said. "It just wasn't mentioned."
To make the bottom line appear black, the Medicaid reserve has been added to the June 20, 2001, surplus as well as the reserve for tuition support.
Nass frowns on labeling funds held in reserve as a surplus. She also said the current Medicare reserve is not enough to cover costs through 2003 at the rate being paid now.
One of the agency revisions used to fluff up the surplus was an $11.4-million item set aside to transfer the disabled and aging from the state-run Muskatuck facility to other facilities.
"The governor ordered that Muskatuck be closed," she said. "Now there is no money to move the residents."
Another thing both auditors frown upon is the use of $375 million in gaming revenues going to the general fund. Gambling, they said, is never a sure source of revenue and isn't stable enough to be used to support the general fund.
The latest "Report To Indiana's Citizens" includes a chart showing how gaming monies are spent.
Nass said after legislators peel off $310.9 million in gambling revenue for state projects and special projects, $236.2 million will be distributed to counties to replace motor vehicle excise tax losses.
"The promise of 50 percent of gaming proceeds going to cities, towns and schools has never been met," Nass said.
Hoosier Lottery money also goes to the Pension Relief Fund and the Teacher's Retirement Fund before going to the Build Indiana Fund.
Nass said 25 percent of the Riverboat Wagering Tax goes for the gaming commission's administrative costs and props up the horse racing parimutuel system.
Mitchell said taxpayers have recently been lulled into a false sense of security by the personal property tax replacement credit. More than $375 million has been spent over the last two years to relieve citizens of this burden.
This spring, though, the full tax will be collected. And, if anyone failed to file a personal property tax claim for the last two years, they will be further assessed a $25 fee for each year.
The list of expected shortages goes on and on, Nass said.
"It's more than a fiscal crisis," she said. "It's a fiscal mismanagement crisis. It's a lack of leadership and inability to make a decision. The governor neither vetoed nor signed a budget bill. He just let it ride."
The current budget spends $500 million more than projected revenues and Nass said the September report is going to show there is $125 million less than projected.
The report is available to anyone who requests a copy by writing the auditor's office, 240 State House, 200 W. Washington St., Indianapolis IN 46204-2793, or by calling 317-232-3300.
Detailed financial statements and data are presented in the State's Comprehensive Annual Financial Report, which is available on the auditor's Web site, www.state.in.us/auditor [[In-content Ad]]