Sunday, May 18, 2008

Indiana to pay remaining $212M owed to local governments

The state will pay off a remaining $212 million owed to local governments by the end of this month, a year ahead of schedule, Gov. Mitch Daniels said Friday.

Daniels said tax collections in March and April were strong and that he was confident the state would end the fiscal year on June 30 with a fourth consecutive budget surplus. The most recent monthly revenue report, for April, showed that revenues for this fiscal year to date exceed that forecast by $133 million.

Meanwhile, spending is being held below the level lawmakers set in the current budget. Daniels said the combination means the state can accelerate the final repayment of debts owed to local governments.

"I believe we responsibly pay now," he said.

During an extended period of deficit spending earlier this decade, the state delayed payments totaling $761 million to schools, universities and local governments. It is essentially a bookkeeping maneuver that pushes spending obligations into future budget cycles so they do not count against the current one.

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