INDIANAPOLIS (December 20, 2006) -- Governor Mitch Daniels today outlined his budget priorities for the next biennium, specifically a proposal to limit spending growth to 4 percent. For the past two years, the state has operated with honestly balanced budgets, and Daniels said it is imperative to do so again for the next two years without gimmicks or general tax increases.

The state is expected to close Fiscal Year 2007 with an adjusted surplus of over $200 million. FY07 revenues are estimated at nearly $12.5 billion and expenditures are about $12.2 billion. The stateÂ?s revenue forecast, issued on December 14, projects revenue growth of 4.2 percent in FY08 and 4.5 percent the following year.

Daniels will urge the General Assembly to limit spending growth to 4 percent or less in the next budget, allowing for more than $1.5 billion for new spending. That approach will give some protection against below forecast revenue and a return to deficit budgets.

Â?Our goal should be a further strengthening of the stateÂ?s finances which, though vastly improved, are not as secure as we want them to be,Â? said the governor.

Many of the governorÂ?s 2007 policy proposals are self-funded and would not compete with other items in the next budget. They are:

• The Plan for a Healthier Indiana, which includes medical insurance for low-income Hoosiers, immunizations for children under 2 years old, and smoking cessation, funded by increases in the price of cigarettes.
• Attacking the Â?brain drainÂ? with Hoosier Hope Scholarships and World Class Scholars programs, funded by franchising the Hoosier Lottery.
• Exploring the feasibility of building the Indiana Commerce Connector and Illiana Expressway. Both would be state-owned but funded entirely by private investors.

The governorÂ?s priorities requiring additional general fund dollars are limited and include:

• New dollars for general support of K-12
• Full-day kindergarten with a front-loaded phase-in
• Provide additional benefits to Hoosier soldiers and veterans
• Adding 400 more child caseworkers to protect vulnerable children

The General Assembly still could support the governorÂ?s priorities and have ample room for increases in other areas. The governor will send a formal budget proposal to the state Budget Committee in Jan