INDIANAPOLIS (October 8, 2009) - State revenues are substantially lower than forecast for the first quarter of Indiana's Fiscal Year 2010, and Governor Mitch Daniels said today it will be more difficult to maintain the state's strong fiscal position if revenues continue to slide.

"The job of keeping Indiana above water and solvent is not getting any easier," said Daniels. "But Indiana remains one of a few states not raising taxes and not cutting vital services."

Revenue collections compared to forecast for the first quarter were off 8 percent or $254 million. If the first quarter trend continues, state budget agency officials estimate the state's revenues could be off by more than $1 billion by June 2010.

"Thank goodness we have built up reserves. And thank goodness we didn't spend them, or lots of them, as some people wanted to do," said Daniels. The state ended the last fiscal year with $1.3 billion in reserves. About $300 million of those reserves are slated to be used in the current budget.

The governor said he will not consider raising taxes if the state's revenues continue to slide. He also said that no additional spending reductions will be made now, but the state will continue to practice measures of thrift. 

"We will continue to reassess our priorities, just like every family and every business.  And we will continue to stretch every dollar and look for savings in every corner. We're doing everything we can to maintain vital services, which other states began to cut long ago," said the governor. "Most of all, we are not going to raise taxes during a time when working families are stretched for money.  Taxes are lower here in Indiana than they were a year ago." 

Daniels said he will also ask the state's revenue technical forecast committee, which provides regular state tax revenue forecasts, to review its forecasting model because of changes in the economy, including shifts in American consumption patterns. The governor also will ask the committee for guidance on what to expect for the next nine months for revenue collections.

"The economy has changed in fundamental ways, but we can't ignore those changes if we are going to continue to protect taxpayers," Daniels continued.  "The best thing we can do is to continue to build a job-friendly, business-friendly environment so that we ultimately have more taxpayers and help lighten the load on everyone."

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Audio from the announcement is available here: http://www.in.gov/gov/audio.htm

Video will be available later today at this link: http://www.youtube.com/watch?v=e8bpOcHzRjc

The September monthly revenue report and supporting documents including a summary of first quarter FY 2010 state revenues is available here: http://www.in.gov/sba/2540.htm.

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