Gov. Eric Holcomb announced May 22 that he has asked the State Budget Agency (SBA) to create plans to reduce state agency appropriations by 15 percent for the 2021 fiscal year to prepare for continued declines in state revenue due to COVID-19.
According to a press release, there was a sharp drop in state revenue in April due to the economic impact of the pandemic.
“This is the first of what is likely to be a number of steps we’ll take to rein in state spending while we continue to provide critical government services to Hoosiers without interruption,” Holcomb said in a statement. “It will be imperative that we effectively manage our resources. During the last economic downturn, the state’s general fund revenues were nearly $3 billion less than forecasted. SBA estimates we could face an even greater loss of general fund revenue in the final 14 months of this biennium.”
The SBA has already taken action to reduce spending for the remainder of the current fiscal year, which will end June 30. In April, several cost saving measures were taken t review operations, space, travel and hiring expenses to find opportunities for savings.
Further, Holcomb said the state would put several previously announced projects, such as a $65 million Next Level Trails grant and a $70 million state parks program, on hold to cut costs.
“By taking immediate action to tighten our belts across state government, we will maintain maximum flexibility to navigate a still very uncertain economic picture,” Holcomb said in a statement. “All options are on the table, and as we approach tax filing deadlines and better understand all of the federal funds available to Indiana, we will make more precise adjustments ahead of crafting a budget for next biennium.”