Ind. sells plane, cuts higher ed. amid shortfall

Governor sells Ind. state plane, cuts higher ed. budget among $141 million budget shortfall

Associated Press

INDIANAPOLIS (AP) -- Indiana Gov. Mike Pence is selling the state plane and asking agencies to cut spending as Indiana deals with a surprise $141 million budget shortfall, he said Monday.

State agencies will have to cut their budgets an additional 1.5 percent and state universities will see aid clipped by 2 percent because of the unexpected drop in tax collections over the first five months of fiscal year 2014. Pence said the moves should save the state about $57 million.

"Fiscal integrity is the foundation of prosperity," Pence said in a statement. "The cost-saving measures we are implementing today will ensure that Indiana remains fiscally sound during these uncertain times."

The shortfall is marginal compared to the state's relative fiscal footing. Pence and Republican lawmakers approved the budget earlier this year that withheld large increases in spending to pay for a round of tax cuts and maintain roughly $2 billion in cash reserves.

Pence retained former Gov. Mitch Daniels' practice of cutting most agency budgets by 3 percent each year, and will tack another 1.5 percent cut on top to save $25 million.

The state's higher education budget already is being cut by 2 percent, or $26.5 million, but a Pence spokeswoman noted Monday that universities received a 5.4 percent spending increase in the latest budget.

Pence also expects to make $2.5 million in selling the state plane, a 2000 King Air B200, that was largely used for travel by the governor and top staff.

The shortfall comes as Indiana appeals the loss of roughly $63 million a year in tobacco settlement money — one a handful of states to lose a portion of the 1998 settlement proceeds for not doing enough to collect funds from some tobacco companies.

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