As State Surplus Rises, Holcomb Seeks Investments
Holcomb's announcement is set for 10:00 a.m. Wednesday.
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As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe NowGovernor Eric Holcomb is proposing major investments following the state’s year end revenue report. Indiana Auditor Tera Klutz released the 2019 fiscal year close-out report Thursday, which says the state ended the year with a budget surplus of $410 million, which exceeded projections by more than $267 million.
As a result, Governor Holcomb says he is recommending the use of nearly $300 million from the state’s reserves to pay for several one-time capital projects, as well as finishing improvements to U.S. 31 between Indianapolis and South Bend.
"We have an opportunity to reduce our ongoing costs by paying cash rather than borrowing for several projects approved by the Indiana General Assembly in this year’s legislative session," Holcomb said in a statement Thursday. "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."
The capital projects being considered include:
- $50 million for the swine barn at the Indiana State Fairgrounds
- $73 million for the Purdue College of Veterinary Medicine teaching hospital
- $60 million for the Ball State University STEM and Health Professions facilities
- $30 million for the Ivy Tech Columbus main building replacement
Additionally, the governor is proposing to provide $78 million for the Indiana Department of Transportation to complete the U.S. 31 project.
Holcomb says the state will maintain reserves of nearly $2 billion, if the proposal is approved by the Indiana General Assembly. He says he will work with legislative leaders in the months leading up to the 2020 legislative session "to demonstrate how the ongoing savings can be best used for tackling our priorities in the next budget, such as providing meaningful increases in teacher compensation so Indiana is competitive with neighboring Midwestern states."
Following the Governor’s announcement, legislators from both sides of the aisle issued responses:
House Speaker Brian Bosma (R-Indianapolis):
Indiana’s surge in revenue is proof that our low tax, pro-business environment and strong record of fiscal responsibility continues to pay dividends for Hoosier taxpayers. I strongly support the governor’s prudent recommendation to use this one-time money to pay cash for much-needed capital projects, which would otherwise require debt financing. This proposal could save over $100 million in interest payments over the next 20 years and free up those funds for important priorities like education and child protection. We look forward to working with Governor Holcomb in the coming months as we finalize plans for the 2020 session.
State Representative Todd Huston (R-Fishers), co-chair of the House Ways and Means Committee:
Using this additional revenue to pay for one-time investments and capital projects around the state is a responsible and prudent use of taxpayer dollars. Thanks to strong fiscal leadership, Indiana can avoid taking on debt, which provides both short and long-term savings. As we move ahead, I look forward to working with the administration, and our House and Senate colleagues to act on these recommendations.
State Rep. Gregory Porter (D-Indianapolis), ranking Democrat on the House Ways and Means Committee:
Chicken Little’s complaints that the sky is falling have nothing on the Republicans in the governor’s office and the General Assembly. Remember their proclamations back in April about the risk of shortfalls in revenue and how that would prevent some programs from getting the funding they deserved?
Now we find that things aren’t so bad after all…like usual. In April, Republicans were predicting a shortfall of close to $100 million. Now we see that there is a surplus of more than $410 million. We also see them continuing to play their little game with reversions as a means to build the surplus. This time they have reverted more than $180 million from Medicaid, which we had been told in the spring was in a crisis situation. So now that we do have more funding, is it OK to spend some money now?
These closeouts are supposed to be occasions for celebration. I think that they should be ashamed and embarrassed that they prize hoarding money over improving human infrastructure.
State Senator Karen Tallian (D-Ogden Dunes):
I’m extremely frustrated that the governor has decided to use $300 million of the budget reserves to pay down projects already appropriated in the budget, especially when there are so many programs that have been completely ignored that desperately need funding. Raising teacher pay, addressing beach erosion issues, funding the mortgage foreclosure program – these are all things that we could have done with our $2.3 billion surplus.