State Budgets: Indiana Imposes Modest Cuts to Balance Budget

December 31, 2008

After announcing that the current $13.3 billion 2009-11 biennial budget faced a shortfall of $763 million, Gov. Mitch Daniels (R) proposed a 3% cut in executive agency budgets (on top of a 7% cut earlier imposed), a 3% reduction in grants and subsidies, a ban on out-of-state travel unless approved by budget officials, spending and hiring restrictions, and a pay freeze for 2009. Daniels promised no cuts to key state programs and declined to consider raising taxes or tapping the state’s $1.4 billion rainy day fund. Daniels is also pursuing a remarkable effort to consolidate Indiana’s excessively duplicative local government functions.

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