Indiana state budget and finances
 in Indiana |
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| Indiana budget and finances | |
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| General information | |
| Budget calendar: Biennial | |
| Fiscal year: 2017 | |
| State credit rating: AAA (as of 2017) | |
| Current governor: Eric Holcomb | |
| Financial figures | |
| Total spending (state and federal funds): $31,406,000,000 (estimated 2016) | |
| Per capita spending: $4,735 (estimated 2016) | |
| Total state tax collections: $17,587,958,000 (2016) | |
| Per capita tax collections: $2,652 (2016) | |
| State debt: $22,463,710,000 (2014) | |
| Per capita state debt: $3,397 (2014) | |
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| State budget and finance pages • Total state expenditures • State debt • Tax policy in Indiana | |
| Note: In comparing dollar amounts across the states, it is important to note that the cost of living can differ from state to state and within a state. The amounts given on this page have not been adjusted to reflect these differences. For more information on "regional price disparities" and the Consumer Price Index, see the U.S. Department of Commerce, Bureau of Economic Analysis. This article, which is updated on an annual basis, was last updated in June 2017. It contains information from several sources; consequently, the currency of the information can vary from source to source. | |
In Indiana, as in other states, lawmakers and public officials are elected in part to manage the state's finances. This includes generating revenues (money coming into the state from various sources) and approving expenditures (the money spent on governmental functions and servicing state debt). State budgets are complex and fluid, as they depend on anticipated revenues and planned expenditures, which may alter over the course of a fiscal year. If revenues do not keep pace with expenditures, states generally have to raise taxes, cut services, borrow money, or a combination of the three. State budget decisions are also influenced by policy decisions at the national level, such as the Affordable Care Act or energy and environmental regulations, and issues at the local level, such as crime and the quality of education.
Definitions
The following terms are used to describe a state's finances:
- Revenues come mainly from tax collections, licensing fees, federal aid, and returns on investments.
- Expenditures generally include spending on government salaries, infrastructure, education, public pensions, public assistance, corrections, Medicaid, and transportation.
- State debt refers to the money borrowed to make up for a deficit when revenues do not cover spending.
- The state credit rating is the grade given by a credit rating agency based on the general financial health of the state's government and economy.
- State funds include general and other state-based funds. A general fund is "the predominant fund for financing a state's operations." Other state funds are "restricted by law for particular governmental functions or activities."[2]
- Federal funds are "funds received directly from the federal government."[2]
- Total spending is calculated by adding together the totals for state and federal funds used for expenditures.
Revenues
2016 revenues
The table below breaks down state government tax collections by source in 2016 (comparable figures from surrounding states are also provided to give additional context). Figures for all columns except "2016 population" and "Per capita collections" are rendered in thousands of dollars (for example, $2,448 translates to $2,448,000). Figures in the columns labeled "2016 population" and "Per capita collections" have not been abbreviated.[3]
| State tax collections by source ($ in thousands), 2016 | ||||||||
|---|---|---|---|---|---|---|---|---|
| State | Property taxes | Sales and gross receipts | Licenses | Income taxes | Other taxes | Total | 2016 population | Per capita collections |
| Indiana | $10,699 | $10,608,207 | $714,634 | $6,252,533 | $1,885 | $17,587,958 | 6,633,053 | $2,652 |
| Illinois | $60,814 | $18,524,265 | $2,745,949 | $17,173,986 | $402,206 | $38,907,220 | 12,801,539 | $3,039 |
| Michigan | $2,034,013 | $13,239,133 | $1,660,663 | $10,202,060 | $300,738 | $27,436,607 | 9,928,300 | $2,763 |
| Ohio | N/A | $18,231,167 | $2,223,747 | $8,202,432 | $37,537 | $28,694,883 | 11,614,373 | $2,471 |
| United States | $18,364,298 | $442,909,995 | $52,164,396 | $392,286,910 | $24,538,146 | $930,263,745 | 322,762,018 | $2,882.20 |
| Source: U.S. Census Bureau, "2016 annual survey of state government tax collections by category," accessed June 26, 2017 | ||||||||
The table below lists 2016 tax collections by source as percentages of total collections. About 60.3 percent of Indiana's total state tax collections came from sales taxes and gross receipts.[3]
| State tax collections by source (as percentages), 2016 | |||||
|---|---|---|---|---|---|
| State | Property taxes | Sales and gross receipts | Licenses | Income taxes | Other taxes |
| Indiana | 0.1% | 60.3% | 4.1% | 35.6% | 0.0% |
| Illinois | 0.2% | 47.6% | 7.1% | 44.1% | 1.0% |
| Michigan | 7.4% | 48.3% | 6.1% | 37.2% | 1.1% |
| Ohio | N/A | 63.5% | 7.7% | 28.6% | 0.1% |
| Source: U.S. Census Bureau, "2016 annual survey of state government tax collections by category," accessed April 4, 2016 | |||||
Federal aid to the state budget
- See also: Federal aid to state budgets
State governments receive aid from the federal government to fund a variety of joint programs, mainly in the form of grants for such things as Medicaid, education, and transportation. In 2014, federal aid to the states accounted for roughly 31 percent of all state general revenues. Federal aid varies from state to state. For example, Mississippi received approximately $7.2 billion in federal aid in 2014, accounting for about 41 percent of the state's general revenues, the highest percentage of all of the states. By contrast, North Dakota received about $1.5 billion in federal aid in 2014, or just 17 percent of the state's general revenues, the lowest percentage in the nation.[4]
The table below notes what share of Indiana’s general revenues came from the federal government in 2014. That year, Indiana received approximately $11.1 billion in federal aid, 33.0 percent of the state's general revenues. Taking into consideration the state's 2014 population, this came out to about $1,664 in federal aid per capita. Figures from surrounding states are provided for additional context.[4]
| Federal aid to state budgets, 2014 | |||||
|---|---|---|---|---|---|
| State | Total federal aid ($ in thousands) | Federal aid as a % of general revenues | Ranking (by % of general revenues) | Est. 2014 population | Aid per capita |
| Indiana | $10,974,721 | 33.0% | 23 | 6,595,233 | $1,664 |
| Illinois | $17,851,826 | 26.5% | 42 | 12,867,544 | $1,387 |
| Michigan | $17,722,616 | 32.1% | 27 | 9,915,767 | $1,787 |
| Ohio | $21,760,672 | 35.0% | 13 | 11,594,408 | $1,877 |
| Sources: United States Census Bureau, "2014 State and Local Government Finances," accessed June 26, 2017 Note: Per-capita figures were generated by Ballotpedia by dividing total federal aid for the state by the estimated population of that state in 2014. | |||||
Spending
Estimated 2016 expenditures
- See also: Total state expenditures
The table below breaks down estimated spending totals for fiscal year 2016 (comparable figures from surrounding states are included to provide additional context). Figures for all columns except "Population” and “Per capita spending" are rendered in millions of dollars (for example, $2,448 translates to $2,448,000,000). Figures in the columns labeled "Population” and “Per capita spending" have not been abbreviated.[5]
The total estimated government spending in Indiana in fiscal year 2016 was $31.4 billion.
| Total estimated state spending, FY 2016 ($ in millions) | |||||
|---|---|---|---|---|---|
| State | State funds | Federal funds | Total spending | Population | Per capita spending |
| Indiana | $18,958 | $12,448 | $31,406 | 6,633,053 | $4,735 |
| Illinois | $39,168 | $16,810 | $55,978 | 12,801,539 | $4,373 |
| Michigan | $31,944 | $22,728 | $54,672 | 9,928,300 | $5,507 |
| Ohio | $55,000 | $12,450 | $67,450 | 11,614,373 | $5,807 |
| Per-capita figures are calculated by taking the state's total spending and dividing by the number of state residents according to United States Census Bureau estimates. Source: National Association of State Budget Officers, "State Expenditure Report (Fiscal 2014-2016)," accessed June 26, 2017 | |||||
Spending by function
State spending in Indiana can be further broken down by function (elementary and secondary education, public assistance, etc.). Fiscal year 2015 information is included in the table below (information from neighboring states is provided for additional context). Figures are rendered as percentages, indicating the share of the total budget spent per category.[5]
In fiscal year 2015, education accounted for 36.6 percent of Indiana's total expenditures.
| State spending by function as a percent of total expenditures, FY 2015 | |||||||
|---|---|---|---|---|---|---|---|
| State | K-12 education | Higher education | Public assistance | Medicaid | Corrections | Trans- portation |
Other |
| Indiana | 30.0% | 6.6% | 1.4% | 31.2% | 2.6% | 5.3% | 22.7% |
| Illinois | 14.0% | 3.4% | 0.3% | 27.1% | 2.4% | 9.0% | 43.7% |
| Michigan | 25.2% | 4.3% | 0.4% | 30.2% | 4.2% | 6.9% | 28.8% |
| Ohio | 16.8% | 4.1% | 1.3% | 37.4% | 2.9% | 5.1% | 32.4% |
| Source: National Association of State Budget Officers Note: "Other" expenditures include "Children's Health Insurance Program (CHIP), institutional and community care for the mentally ill and developmentally disabled, public health programs, employer contributions to pensions and health benefits, economic development, environmental projects, state police, parks and recreation, housing and general aid to local governments."[5] | |||||||
Spending trends
The table below details the spending trends in Indiana in previous years. Figures are rendered as percentages, indicating the share of the total budget spent per category.[1][6][7]
| Spending by function from 2010 to 2015 (as percentages) | |||||||
|---|---|---|---|---|---|---|---|
| Year | K-12 education | Higher education | Public assistance | Medicaid | Corrections | Transportation | Other |
| 2015 | 30.0% | 6.6% | 1.4% | 31.2% | 2.6% | 5.3% | 22.7% |
| 2014 | 32.0% | 6.6% | 1.5% | 32.0% | 2.8% | 5.9% | 19.2% |
| 2013 | 30.8% | 6.1% | 1.4% | 31.2% | 2.7% | 8.3% | 19.6% |
| 2012 | 32.9% | 6.5% | 1.5% | 27.3% | 2.9% | 9.3% | 19.7% |
| 2011 | 32.2% | 7.1% | 1.4% | 25.0% | 2.9% | 10.9% | 20.4% |
| 2010 | 32.4% | 7.1% | 1.4% | 23.1% | 2.9% | 10.6% | 22.4% |
| Source: National Association of State Budget Officers Note: "Other" expenditures include "Children's Health Insurance Program (CHIP), institutional and community care for the mentally ill and developmentally disabled, public health programs, employer contributions to pensions and health benefits, economic development, environmental projects, state police, parks and recreation, housing and general aid to local governments."[5] | |||||||
State debt
- See also: Indiana state debt
State debt refers to any debt owned by a state government. Debt may include any financial obligations a state has that have not been paid, such as bonds issued by state governments, money borrowed by a state government that has not been repaid, or post-retirement benefits promised to state employees. According to the U.S. Census Bureau, Indiana had a debt of $22,463,710,000 in fiscal year 2015. The state debt per capita was $3,397. This ranked Indiana 15th among the states in debt and 21st in per capita debt. The total state debt owned by the 50 states was $1.15 trillion with a per capita debt of $3,582.[8]
Economic indicators
- See also: Economic indicators by state
Broadly defined, a healthy economy is typically one that has a "stable and strong rate of economic growth" (gross state product, in this case) and low unemployment, among many other factors. The economic health of a state can significantly affect its healthcare costs, insurance coverage, access to care, and citizens' physical and mental health. For instance, during economic downturns, employers may reduce insurance coverage for employees, while those who are laid off may lose coverage altogether. Individuals also tend to spend less on non-urgent care or postpone visits to the doctor when times are hard. These changes in turn may affect the decisions made by policymakers as they react to shifts in the industry. Additionally, a person's socioeconomic status has profound effects on their access to care and the quality of care received.[9][10][11]
In 2013, about 12 percent of Indiana residents earned incomes below the poverty level, the lowest percentage among neighboring states. Between 2011 and 2013, Indiana's median annual household income was $48,178. The state's unemployment rate in September 2014 was just below the national rate.[12][13][14][15]
Note: Gross state product (GSP) on its own is not necessarily an indicator of economic health; GSP may also be influenced by state population size. Many factors must be looked at together to assess state economic health.
| Various economic indicators by state | ||||||||
|---|---|---|---|---|---|---|---|---|
| State | Distribution of population by FPL* (2013) | Median annual income (2011-2013) | Unemployment rate | Total GSP (2013)† | ||||
| Under 100% | 100-199% | 200-399% | 400%+ | Sept. 2013 | Sept. 2014 | |||
| Indiana | 12% | 23% | 31% | 35% | $48,178 | 7.3% | 5.7% | $317,102 |
| Illinois | 13% | 17% | 31% | 39% | $54,083 | 9.1% | 6.6% | $720,692 |
| Michigan | 15% | 19% | 30% | 37% | $49,902 | 8.8% | 7.2% | $432,573 |
| Ohio | 14% | 21% | 33% | 32% | $46,672 | 7.4% | 5.6% | $565,272 |
| United States | 15% | 19% | 30% | 36% | $52,047 | 7.2% | 5.9% | $16,701,415 |
| * Federal Poverty Level. "The U.S. Census Bureau's poverty threshold for a family with two adults and one child was $18,751 in 2013. This is the official measurement of poverty used by the Federal Government." † Median annual household income, 2011-2013. ‡ In millions of current dollars. "Gross State Product is a measurement of a state's output; it is the sum of value added from all industries in the state." Source: The Henry J. Kaiser Family Foundation, "State Health Facts" | ||||||||
Budget process
The state operates on a biennial budget cycle. The sequence of key events in the budget process is as follows:[16]
- In early Summer of the year preceding the beginning of the new biennium, budget instructions are sent to state agencies.
- By September 1, agencies submit their budget requests to the governor.
- Hearings are held with the public from November to April.
- The governor submits his or her budget to the state legislature in January.
- The legislature typically adopts a budget in April, effective for the fiscal biennium beginning in July. A simple majority is required to pass a budget.
There are no constitutional or statutory provisions mandating that the governor submit or sign a balanced budget. Budget deficits may be carried over to the next biennium.[16]
Indiana is one of six states in which the governor cannot exercise line item veto authority.[16][17]
Offices, and committees
There are three major standing committees in the Indiana State Legislature that deal with budget and finance matters: the House Ways and Means Committee, the Senate Appropriations Committee and the Senate Tax and Fiscal Policy Committee.[18]
Fiscal duties in Indiana are split between the Indiana Office of Management and Budget (OMB), the state auditor and the state treasurer.[19][20]
The Indiana State Auditor is the chief financial officer of the state and is responsible for the following:[21]
- accounting for all of the state's funds
- overseeing and disbursing county, city, town, and school tax distributions
- paying the state's bills
- paying the state's employees
- administrating Indiana’s Deferred Compensation Plan
Public Interest Research Group 2016 report
The U.S. Public Interest Research Group, a consumer-focused nonprofit organization based in Washington, D.C., released its annual report on state transparency websites in April 2016. The report, entitled "Following the Money," measured how transparent and accountable state websites were with regard to state government spending. According to the report, Indiana received a grade of A+ and a numerical score of 100, indicating that Indiana was "Leading" in terms of transparency regarding state spending.[22]
Budget and finance ballot measures
Ballotpedia has tracked the following ballot measures relating to state and local budget and financial matters in Indiana.
Budget and finance legislation
The following is a list of recent budget and finance bills that have been introduced in or passed by the Indiana state legislature. To learn more about each of these bills, click the bill title. This information is provided by BillTrack50 and LegiScan.
Note: Due to the nature of the sorting process used to generate this list, some results may not be relevant to the topic. If no bills are displayed below, no legislation pertaining to this topic has been introduced in the legislature recently.
Recent news
The link below is to the most recent stories in a Google news search for the terms Indiana budget. These results are automatically generated from Google. Ballotpedia does not curate or endorse these articles.
See also
- Historical Indiana budget and finance information
- Tax policy in Indiana
- Indiana government sector lobbying
- Indiana public pensions
- Governor of Indiana
- Indiana State Senate
- Indiana House of Representatives
- Indiana State Legislature
Footnotes
- ↑ 1.0 1.1 National Association of State Budget Officers, "State Expenditure Report (Fiscal 2014-2016)," accessed June 26, 2017
- ↑ 2.0 2.1 National Association of State Budget Officers, "State Expenditure Report: 2013-2015," accessed April 7, 2016
- ↑ 3.0 3.1 U.S. Census Bureau, "2016 annual survey of state government tax collections by category," accessed June 26, 2017
- ↑ 4.0 4.1 United States Census Bureau, "2014 State and Local Government Finances," accessed June 26, 2017
- ↑ 5.0 5.1 5.2 5.3 National Association of State Budget Officers, "Summaries of Fiscal Year 2015 Proposed and Enacted Budgets," July 11, 2014
- ↑ National Association of State Budget Officers, "State Expenditure Report, 2009-2011," accessed February 24, 2014
- ↑ National Association of State Budget Officers, "State Expenditures Report, 2010-2012," accessed February 24, 2014
- ↑ United States Census Bureau, "State Government Finances," accessed June 4, 2017
- ↑ Academy Health, "Impact of the Economy on Health Care," August 2009
- ↑ The Conversation, "Budget explainer: What do key economic indicators tell us about the state of the economy?" May 6, 2015
- ↑ Health Affairs, "Socioeconomic Disparities In Health: Pathways And Policies," accessed July 13, 2015
- ↑ The Henry J. Kaiser Family Foundation, "Distribution of Total Population by Federal Poverty Level," accessed July 17, 2015
- ↑ The Henry J. Kaiser Family Foundation, "Median Annual Household Income," accessed July 17, 2015
- ↑ The Henry J. Kaiser Family Foundation, "Unemployment Rate (Seasonally Adjusted)," accessed July 17, 2015
- ↑ The Henry J. Kaiser Family Foundation, "Total Gross State Product (GSP) (millions of current dollars)," accessed July 17, 2015
- ↑ 16.0 16.1 16.2 National Association of State Budget Officers, "Budget Processes in the States, Spring 2021," accessed January 24, 2023
- ↑ National Conference of State Legislatures, "Separation of Powers: Executive Veto Powers," accessed January 26, 2024
- ↑ Indiana General Assembly, "Standing Committees," accessed February 25, 2015
- ↑ IN.gov, "Office of Management and Budget," accessed March 14, 2014
- ↑ IN.gov, "State Auditor," accessed March 14, 2014
- ↑ IN.gov, "Indiana Auditor Suzanne Crouch - Auditor's Info," accessed March 14, 2014
- ↑ U.S. Public Interest Research Group, "Following the Money 2016 Report," accessed June 29, 2017
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