Indiana tax collections continue to fall short of projections, and that has prompted Governor Mitch Daniels to order spending cuts and other steps to offset a budget shortfall.
Daniels says revenues are off more than $300 million thus far this fiscal year, and if the trend continues without cuts, the state’s reserves will be wiped out by next August.
The governor is directing state agencies to cut spending by ten-percent, reducing reimbursements to some Medicaid providers and says the state will offer voluntary unpaid leave for the rest of the fiscal year.
Daniels says he doesn’t know yet if there will be any job cuts.
“Up to this point, we have managed economy in state government with few if any involuntary terminations, except for poor performance. I can’t say that will remain the case here. We’re going to try our very best. If anyone is displaced, we will put them at the front of the line for any openings that occur in state government,” Daniels said
Daniels says there will also be no pay hikes for state workers in 2010.