In response to a nearly $1 billion revenue shortfall due to the novel coronavirus, Gov. Eric Holcomb announced plans to reduce agency appropriations for the next fiscal year – with additional maintenance and capital projects on the chopping block.
State agencies are being asked to review operations, space, travel and hiring to cut their budgets by 15 percent.
Holcomb says this is just the first step the state is taking to make up for revenue shortfalls. The State Budget Agency estimates this could be worse than Indiana experienced in the last recession.
The governor stressed, these cutbacks would not affect essential services.
“Obviously, we’re not going to do anything that’s counterproductive in terms of our COVID-19 response,” Holcomb says.
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Office of Management and Budget Director Cris Johnston says these measures are an initial – but expected – step. The State Budget Agency began spending reductions in April.
“There are going to be different steps we take over time as we learn more about the revenue picture, the extent of federal assistance, as well as any flexibility to the existing assistance that we’ve already received,” Johnston says.
In addition to state agency cutbacks, the governor’s office announced $291 million for capital projects from the budget surplus, $65 million in Next Level Trails grants, and $110 million of deferred maintenance projects – including $70 million for state parks – are on hold.