The news headlines say it all: our federal government is struggling. Gridlock and debt plague Washington D.C., and in the wake of the recent shutdown, many Americans are losing trust in those behind the economic steering wheel.
Despite these troubles, Indiana remains the fiscal envy of the nation. In fact, a recent study revealed that Indiana was among the states least likely to be affected by the federal government shutdown. That sets us apart as a strong, independent financial leader in which families and businesses can confidently invest.
We can thank years of accountability and responsible spending for our state's strong fiscal position today. This past summer, the state auditor's closeout report for the 2012-2013 fiscal year showed that Indiana had a structural surplus of $483 million – $93 million more than initial budget estimates predicted. Our revenues are now $86 million higher than anticipated, totaling more than $1.94 billion. That gives us the security we need to meet Hoosiers' needs and allow our state to continue to prosper.
In the 2013 legislative session, the Indiana General Assembly sought to continue that trend for the 2014-2015 fiscal year. We passed an honestly balanced budget that set aside approximately $2.2 billion in reserves with ongoing revenues exceeding ongoing expenses for each year of the biennium. Our financial accountability also allowed us to bolster essential services, like education, roads and infrastructure, and health care.
To add to that, we enacted the largest tax cut in state history – more than $600 million per year. The combination of the income tax cut, inheritance tax elimination and other business tax decreases made us the only state to attain more than $1 billion in tax cuts over the next two years. For that reason, The Tax Foundation – the nation's leading independent, nonpartisan organization on federal and state tax policy research – recently named Indiana as the 10th-best state tax system, ousting Texas from that spot and ranking us number one in the Midwest.
But even with these impressive gains, Indiana vowed to remain fiscally responsible. State leaders paid off $282 million in debt on state-owned facilities, including several state office buildings, forensics labs, the Indiana State Museum and the Miami Correctional Facility. While other states continue to burden their taxpayers with excess spending and mismanaged debt, Indiana has shown that it has prepared for a bright future.
As the General Assembly looks toward the upcoming 2014 legislative session, our goal is to continue to encourage these responsible habits. In spite of the odds, Indiana has made steady financial progress, but there is still much work to be done. My fellow lawmakers and I will support sound fiscal policy that benefits Hoosier taxpayers, strengthens growing businesses and gives our state the foundation it needs to flourish.