Indiana is beginning to further tighten its belt as revenue forecasts show steep declines heading into the next fiscal year. Governor Eric Holcomb on Friday announced he has asked the State Budget Agency to initiate plans to reduce state agency appropriations by 15% for fiscal year 2021, which begins on July 1.
The state has been registering a sharp drop in state revenues from reduced tax collections and closed casinos, and the outlook is not any better. Two weeks ago, the SBA announced general fund revenues in April were $960 million short, nearly half of forecasted levels.
“This is the first of what is likely to be a number of steps we’ll take to rein in state spending while we continue to provide critical government services to Hoosiers without interruption,” Gov. Holcomb said. “It will be imperative that we effectively manage our resources.”
Governor Holcomb’s office says the SBA has already taken steps to reduce spending for the remainder of the current fiscal year, which ends June 30.
Some of the cost savings measures included a review of operations, travel, and hiring at state agencies.
The state has also put some projects on hold, including the use of $291 million in reserves to pay for several capital projects approved in the 2020 legislative session.
“By taking immediate action to tighten our belts across state government, we will maintain maximum flexibility to navigate a still very uncertain economic picture,” said Holcomb. “All options are on the table, and as we approach tax filing deadlines and better understand all of the federal funds available to Indiana, we will make more precise adjustments ahead of crafting a budget for next biennium.”