Indiana closed its books for the 2024 fiscal year this week, and while the state’s surplus fell by nearly 13% from the previous year, Gov. Eric Holcomb and other officials said the year-end report showed the state’s financial standing remains solid.
When the fiscal year ended June 30, Indiana finished with a surplus of $2.55 billion in its coffers. That total was down nearly $375 million from 2023. Operating revenues rose 1.5% from last year to $21.91 billion.
Holcomb, in a statement, called the reserve amount “healthy,” saying it will allow the state’s economy to remain strong after he leaves office next January.
“Once again, Indiana’s fiscal leaders have delivered on what Hoosiers have come to expect: fiscal responsibility,” he said.
Indiana used the reserve funds to help cover a roughly billion-dollar shortfall in the state’s Medicaid program. That was discovered in late 2023 after officials failed to adequately determine the cost of programs designed to give recipients the specialized care they need in their homes or communities instead of long-term care facilities.
Senate Appropriations Chair Ryan Mishler, R-Mishawaka, said in a statement the Medicaid snafu shows why the state needs to be prudent with taxpayer funds.
“While Indiana did dip into reserves for the Medicaid program, our state is once again closing out the fiscal year with prudent reserve levels,” he added. “We must remain disciplined in order to maintain our state’s positive fiscal standing in the coming years.”
Mishler said he remains concerned about Medicaid spending, as it is growing at an unsustainable pace.
State Rep. Gregory W. Porter, an Indianapolis Democrat who serves on the State Budget Committee with Mishler, said the report showed the state met lawmakers’ expectations and still left a substantial reserve in place. However, he warned colleagues they will need to increase spending next year.
“We’ll only have an estimated $844 million for new programs and expansions, which is not enough,” Porter explained. “Our spending in the 2023 budget for new programs and expansions was over $1 billion. I encourage my colleagues across the aisle to consider the growing mismatch between our revenue and spending priorities. We can’t continue underfunding our social programs.”
By dipping into the reserve funds this past cycle, Indiana’s surplus now equals 11.6% of general fund revenues. Aside from the 2020 fiscal year, which faced significant disruptions due to the COVID-19 pandemic, that’s the lowest it’s been since 2018 when that year’s $1.79 billion surplus equaled 11.3% of Indiana’s funds.
Still, State Comptroller Elise Nieshalla said reserves equal to 10% to 15% of revenues are a good indicator that Indiana officials are adhering to conservative spending policies.
“Indiana’s healthy reserves and standing as the seventh lowest debt per capita state showcases our high level of fiscal responsibility, especially during a time when our country is facing a national debt crisis,” said Nieshalla, who called the federal government’s $35 trillion debt the biggest threat to the state’s economy.
Comments