The Indiana State Budget

Introduction
Indiana's state government makes a lot of information available about its state budget, but it's in a form that many people find hard to understand. There are revenue projections from the State Budget Agency, revenue reports from the Department of Revenue, budget bills considered by the General Assembly, and lists of appropriations and fund balances from the Budget Agency. State budget accounting is necessarily complicated. Still, there ought to be a way to combine the revenue, appropriation and fund balance information so everyone can understand.

The state's budget, after all, is not so different from a family's checking or savings account statement. The state starts the year with balances in its checking and savings accounts--the general fund and rainy day fund balances. During the year money comes in from various sources, mostly from taxes. During the year money goes out, in payments authorized by the budget which the General Assembly has passed. At the end of the year balances are left in checking and savings. If the state has spent more than it has taken in during the year, balances are lower than at the year's start. If the state has taken in more than it has spent, balances are higher. And, just as your bank objects when you bounce a check, so the Indiana Constitution requires that the state keep a positive balance in its checking account.

Revenues, Expenditures and Balances
The Indiana State budget was in great shape in fiscal 1998, 1999 and 2000. Fund balances were near $2 billion at the start of each fiscal year (July 1 of one year to June 30 of the next). Total revenues grew by hundreds of millions each year, and so did expenditures. There were tax cuts, special appropriations, and the state socked money away in the rainy day fund. This budget summary table shows how good the good times were.

Indiana State Budget Summary, FY 1998-2003, with Proposed 2004 and 2005
(millions of dollars)


	Actual	Actual	Actual	Actual	Actual	Est.	Propos.	Propos.
	1998	1999	2000	2001	2002	2003	2004	2005

Start of Year Balances	1,844	2,055	1,991	1,638	910	534	494	286

Revenues
Sales Tax	3,251	3,396	3,651	3,694	3,761	4,303	4,889	5,128
Individual Income Tax	3,435	3,699	3,753	3,780	3,541	3,698	3,839	4,033
Corporate Income Tax	1,016	1,044	985	855	709	550	561	581
All Other	781	801	810	794	784	1,441	1,527	1,578
Total	8,482	8,941	9,200	9,123	8,796	9,992	10,815	11,319

Expenditures
K-12 Education	3,464	3,652	3,905	4,115	4,185	4,241	4,126	4,133
Higher Education	1,190	1,242	1,331	1,390	1,411	1,411	1,399	1,395
Medicaid	929	987	1,042	1,144	1,171	1,249	1,344	1,452
Property Tax Relief	870	963	1,057	1,154	1,180	1,731	2,306	2,415
Health & Social Services	654	659	757	774	858	855	793	794
Public Safety	524	524	621	623	678	681	667	682
All Other	882	1,093	1,015	990	824	896	698	690
Total	8,513	9,120	9,728	10,189	10,307	11,065	11,331	11,560

Current Year Surplus/Deficit	(31)	(179)	(528)	(1,066)	(1,511)	(1,073)	(517)	(241)

Transfers from (to) Other Funds	(2)	(16)	15	150	973	291	477	45
Reversions	215	87	134	103	145	421	25	185
Payment Delays	-	-	-	-	374	362	15	11

End of Year Balances
General Fund	1,319	1,211	833	19	0	1	0	1
Tuition Reserve	240	255	265	265	265	265	265	265
Medicaid Reserve	-	-	-	100	-	-	-	-
Rainy Day Fund	496	525	540	526	269	228	21	53
Total	2,055	1,991	1,638	910	534	494

Links to More Information
To Find:	Go To:
A two-page handout about the Indiana state budget	This website: State Budget Handout (PDF file)
Information about the state budget, revenues and fund balances from the State Budget Agency	State Budget Agency website
Information about state taxes, other revenue sources, fund balances and the state budget from the Legislative Services Agency's Handbook of Taxes, Revenues and Appropriations	General Assembly website