Yesterday Indiana joined the growing class of states forced to make education cuts in response to thinning revenue streams. But unlike many in its cohort, Indiana enjoys a billion-dollar rainy-day fund that more than covers the $300 million that Gov. Mitch Daniels wants to divert from K-12 spending. And thanks to the stimulus bill passed earlier this year, Hoosiers sit on top of an additional $1.3 billion of projected funding, of which $610 million has been spent. With just under $2 billion available, slashing education spending seems unnecessary.
Yet Daniels, a Republican, has built his gubernatorial reputation on keeping Indiana in the black. Commenting on the education cuts, he warned that spending all of the reserves "would be very foolhardy." As a former executive of pharmaceutical giant Eli Lilly and OMB chief during the early Bush years, his managerial style is expectedly frugal, even if he did play an instrumental role in drafting and pitching the 2001 tax cut. And maybe that’s where much of the frustration stems from: He helped deplete the budget surplus during the last recession but is cautious to spend available funds when they’re most needed today. Staying in the black when cuts to vital portions of the budget are the only way to maintain solvency sidesteps the principal reason governments exist. The state’s coffers indicate that the issue isn't staying above the water. So, is the point to be thrifty, or to provide Hoosiers with necessary services?
--Mikhail Zinshteyn
Mikhail Zinshteyn is a Prospect editorial intern.
