Daniels to cut state spending by 10%

INDIANAPOLIS (WISH) - More state budget cuts are on the way as Governor Mitch Daniels looks for ways to battle yet another budget shortfall.

State government already has fewer employees than at any time since 1983 and up until now the governor has avoided layoffs.

"I can't say that that will remain the case here," said Gov. Daniels. "We're going to try our very best. If anybody is displaced we'll put them at the front of the line for any openings that occur in state government but it may not be avoidable."

The problem is a growing budget shortfall that amounts to more than $300 million in just the last four months. Tax revenues are more than 7% below projection since a new budget took effect in July.

House Speaker Pat Bauer (D-South Bend) previously advocated spending some of the state surplus.

24-Hour News 8 political reporter Jim Shella asked the Bauer if it should be preserved and he said simply, "Yes." The change in position is significant.

The speaker also informed fellow Democrats Friday that there is no money to spend in 2010.

"I am advising the members of my caucus that we don't need any general fund budget increases in the short session," said Bauer.

The governor, meantime, ordered 10% cuts in state agencies and eliminated raises in state government for a second year in a row.

He has instituted a voluntary furlough program and delayed construction projects.

The goal is to preserve a small increase in school funding.

"I hope that we can deliver that increase," said Daniels. "But it's going to be hard to do that. It's half the budget."

What that means is that if the current trend continues school funding is not just the next place to turn, it may be the only place to go.

The 10% agency cuts are on top of 5% cuts ordered in July and 10% cuts last year.