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Editorials

July 10, 2012

THEIR OPINION: Editorials from around Indiana

> SOUTHERN INDIANA — Fiscal health gives Indiana an edge

Here’s a tale of two states that should make Hoosiers glad they live on the east bank of the Wabash — at least when it comes to paying for state government.

Last week in Indiana, the Daniels administration announced that the state’s budget reserves had topped $2 billion, enough to trigger $100 rebates for individual tax filers and $200 for couples who file jointly. In total, the state will give back about $300 million to taxpayers, and although the individual sums are by no means large, the refunds are enough to provide hard-pressed families with a bit more cushion for a week or two.

In Illinois, meanwhile, the fiscal picture is far less cheery.

Last year, Illinois lawmakers scrambled to close a budget shortfall estimated at $11 billion. Despite substantial tax increases and deep cuts in services, the state ended the 2012 fiscal year, which closed June 30, with a shortfall of more than $8 billion. In fact, Illinois’ auditor general recently released a report describing the state’s deficit as the nation’s worst based on the percentage of revenue.

The point here isn’t to pretend that all is well in Indiana while Illinois falls apart. The important takeaway is in acknowledging that when state leaders have enough discipline to make difficult fiscal decisions, despite political pressures to avoid temporary pain, the long-term benefits are substantial.

Gov. Mitch Daniels and leaders in the Indiana House and Senate deserve credit for the foresight to ride out the fiscal storm without resorting to the budget gimmicks and stopgap measures that some political leaders in this state and elsewhere championed.

As the economy continues to rebound, Indiana is poised to pump more money into education, human services and infrastructure. In contrast, a majority of other states — more than 30 are expected to run budget deficits in fiscal year 2013, according to the Center on Budget and Policy Priorities — will have to cut spending further or raise taxes as they slog through another tough budget cycle. Indiana, in short, now has a competitive advantage, one it needs to press to maximum effect.

— The Indianapolis Star, July 6

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