(INDIANAPOLIS) - Governor Pence says he wants to keep the purse strings tight in the next state budget.
Pence has insisted on a reserve of one-eighth of total state spending as a firewall against recession. He's directed state agencies to trim their budgeted amounts by three-percent and state universities by two-percent to keep that reserve on track.
Pence says he's still working on the spending plan he'll present to legislators in five months, but says that reserve target won't change. He says it's one of Indiana's key selling points in attracting business and jobs to the state.
The state fell half-a-percent short of expected revenues last month, the first month of the new fiscal year.
The one-eighth figure is the maximum surplus allowed by state law. Anything above that at the end of a two-year budget cycle triggers an automatic tax refund.
State Democratic Chairman John Zody charges the state is paying for its rainy day fund with "a subpar quality of life." Democratic legislators and a few Republicans have questioned the practice of withholding money legislators budgeted.
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