As many states continue to grapple with budget crises that arose as a result of the recession, Indiana appears to stand out from the crowd. The state announced yesterday that it “closed out the budget year that ended June 30 with a surplus of about $1.2 billion.”
While this may seem like a laudable achievement, when you look at how the state reached this number, the surplus is much less impressive. Yesterday, state Auditor Tim Berry admitted that a major reason Indiana has such a large surplus is because it was “built on the backs of state employees,” who had to take on longer workloads and reduced compensation. Referring to these employees, Gov. Mitch Daniels (R-IN) praised them for their “terrific job of cost control“:
State Auditor Tim Berry called the state workers who bore most of those budget cuts via greater workloads, “heroes.” “The surplus was built on the backs of state employees,” said Berry, after he thanked them for tightening their belts. […] “More money in Hoosiers’ incomes and a terrific job of cost control by state employees working together combined to produce an even stronger result than we expected at budget time,” Daniels said in a statement Thursday. He planned a Friday morning press conference to discuss the budget.
Indeed, Indiana achieved its surplus only by taking the most regressive of measures, not by asking for any sacrifice by some of its wealthiest citizens. In addition to sacrifices made by the state’s public workers, the state’s Department of Child Services took a $104 million budget cut last year, and the state’s K-12 education system lost $491 million over the last two fiscal years.
While balancing the state’s budget is actually required by law in Indiana, having such a surplus is no great accomplishmnent if it was done in a way that harmed the state’s economy and hurt the wages, benefits, and conditions of hard-working middle class Indianans while leaving the wealthiest untouched.