Indiana is cutting another 2 percent from the state’s public colleges and universities in response to concerns about lagging tax revenues. That’s in addition to the 2 percent it cut last fiscal year.
Governor Mike Pence announced cuts last year to state agency budgets after tax collections came in dramatically below expectations for the first half of the last fiscal year. He included a 2 percent cut to higher education funding. The state ultimately ended the fiscal year just above projections.
But State Budget Director Brian Bailey says there’s still concern about state revenues going forward in the fiscal year that began last month, and that continued cost savings is needed to maintain the state’s two billion dollar budget reserve.
“Why the governor believes it’s important," says Bailey, "why we believe it’s important is that is helps preserve dollars to spend on state agencies and universities through a critical downturn in the economy.”
But Senate Appropriations Committee Chair Luke Kenley says lawmakers made a deal with universities – keep tuition increases low and in return the state budget will include an appropriate funding level.
“The fact that the state may be cutting back here, it puts pressure on them to just go out and make these other decisions which would have negative consequences," says Kenley. "For example, tuition increases.”
The 2 percent cut for universities represents about $27 million. Bailey says if tax collections meet expectations through 11 months of the fiscal year – that is, by next June – the state will release the money cut from the current fiscal year back to the higher ed institutions.
