INDIANAPOLIS – Buried in the weeds of the state budget discussions is a move by Republicans to save less money and spend more.
It's all about what is considered a safe surplus amount – aka the state's savings account – should another recession hit and blunt tax collections. And a downturn could come soon as economists say the U.S. is years overdue for another recession.
Gov. Eric Holcomb's administration is pushing a two-year budget plan that would end with an 11 percent reserve, or about $1.8 billion. That means a reserve that would cover 11 percent of annual operating costs.
In household terms, if a family spends about $100,000 a year on expenses from mortgages to food that would equate to a savings account of $11,000.
“The target has always been 10 to 12 percent. Yes it has fluctuated up. More than 12 percent is not, I don't think, responsible. I think that's holding taxpayer money that should be expended,” said GOP House Speaker Brian Bosma (R-Indianapolis). “Less than 10 percent clearly places our AAA bond rating and our excellent economic outlook at risk.
“It doesn't have to be 11 percent on the nose but I support right in that area of 11ish.”
A small shift means hundreds of millions available for services.
But the reserve level used to be higher.
The state closed the books in June 2015 with 14.1 percent or $2.1 billion on hand. And former Gov. Mike Pence said in August of that year that 12.5 percent was his bottom line on the surplus.