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Gov. Daniels Takes Paycut Amongst Budget Cuts

Last updated on Friday, December 12, 2008

(UNDATED) - The recession has wiped out three-quarters-of-a-billion dollars Indiana was counting on for the current budget, and Governor Daniels has announced a fresh round of spending cuts to close the gap.

Governor Daniels had already ordered state agencies to cut budgets by seven-percent, in anticipation of a gloomy economic forecast. That forecast shows sales taxes plunging $100-million dollars from last year, instead of the slight increase called for in the budget.

Overall tax collections are now expected to drop four-percent from last year, and five-and-a-half-percent from what budgeters had counted on.

The forecast calls for a weak recovery in the next two-year budget -- tax collections in fiscal 2011 are expected to come in below what the state thought it could count on for the current fiscal year.

In response, Daniels has told agency heads to cut another three-percent cut, and he's freezing all hiring and out-of-state travel unless there's a clear economic benefit. He's also freezing state employees' pay, including his own.

House and Senate leaders have agreed legislators will give up their scheduled raise in July.

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