Gov. Mitch Daniels announced a new round of cuts in state government spending today in the wake of another month of bad revenue numbers for the state. General fund revenues to date this year are $309 million, or 7.4% less, than state budget planners' forecast. Gov. Daniels announced cuts today to reduce state spending by $300-$400 million. Those cuts include:
- State agencies will reduce spending by at least 10 percent from the as-passed budget. The governor had already ordered a 5 percent spending reduction in July.
The lieutenant governor, auditor, treasurer, secretary of state, and superintendent of public instruction have committed to 10 percent spending reductions in their own office budgets.
- Reimbursements to some Medicaid providers will be reduced.
- State employees will not receive a pay increase in 2010, the same action as 2009. The last time there were back-to-back years with no pay raises was in 2002 and 2003.
Governor Daniels will not accept his full pay in 2010, the same action he took for 2009 when his salary was due to increase from $95,000 to $107,882.
- State agencies will offer voluntary unpaid leave for the remainder of the current fiscal year.
- State agency capital projects will be deferred. This includes new buildings or structures, infrastructure and system upgrades, and site improvements.
- Some dedicated funds will be transferred to the general fund. Amounts will vary and will not disrupt the long-term viability of the program supported by the dedicated funds.
Gov. Daniels doesn't specify which Medicaid providers' reimbursement rates will be reduced, but I would recommend he start by forcing the Health & Hospital Corporation's nursing homes to take a reduction and receive the same reimbursement rate as other nursing homes are receiving. I can assure you that won't happen. The HHC's nursing home scam is costing the federal government dearly and Daniels' targeted cuts won't focus on saving money for the federal government.
UPDATE: Sure enough, Daniels cuts will only extent to private Medicaid contractors according to the Star's Bill Ruthhart. Because HHC pretends it owns nursing homes a private company actually owns and operates, I suppose that means they're in the clear.