Indianapolis - The Administration is working to offset the expected impact of mandated spending cuts to federal services the state provides to Hoosiers. The cuts are part of federal sequestration, which began March 2."Thanks to Indiana's strong fiscal position and careful management, the state will be able to manage the budget cuts with minimal impact to Hoosiers," said Chris Atkins, Director of the Office of Management and Budget.
State agencies are making every effort to absorb the cuts administratively wherever possible, to minimize the impact on programs and services Hoosiers rely on. For example:
- The sequestration cut will eliminate $4.1 million in food funds from the state's Women Infants and Children program (WIC). Due to Indiana's low transportation cost, administrative cuts of $1.6 million and a declining WIC caseload, Indiana will continue to provide full benefits to all recipients.
- The Department of Workforce Development (DWD) will see funding for job seeker services reduced by $1.1 million and GED remediation cut by $515,000. DWD will mitigate the impact of these cuts completely with a discounted contract extension and a performance-based funding model.
- The Department of Labor (DOL) will lose some federal matching dollars for the Indiana Occupational Safety and Health Administration and INSafe, but can minimize the cuts with other funding sources. In addition, DOL is implementing new technologies later this year to increase efficiency and minimize personnel redundancy. The department expects significant cost savings that will mitigate any effects of sequestration.
Cuts to federal unemployment benefits cannot be mitigated by the state. Per instruction from the U.S. Department of Labor on Friday, March 1, EUC benefits to 33,000 Hoosiers will be reduced by 10.7 percent beginning March 31.
The Indiana National Guard will put 1,000 Army and Air National Guard full-time military technicians into unpaid furlough one day a week from the end of April through September. The Guard also will hold off on awarding $30 million in military construction projects at Terre Haute and South Bend for fiscal year 2013. The Guard will implement changes to training methods and will stagger furloughs to reduce training costs and ensure that mission requirements are still met.
The state will not backfill the federal cuts, but thanks to Indiana's hard work in balancing the budget and holding the line on spending, the state is poised to make strong investments in some of the very areas the federal government is cutting, including education and job training. Governor Pence's budget includes $127 million in new funding for Indiana schools, full funding of our state-funded college aid, and $18 million in additional job training funds, all of which would help mitigate the impact of sequestration.
A number of state agencies, including the Department of Homeland Security, the Family and Social Services Administration, and the State Department of Health have not received guidance from the federal government about how the cuts will be administered. These agencies have put together their best estimates on the impact and are preparing to handle the cuts with as little impact on services and programs as possible.
The Bureau of Motor Vehicles, the Department of Environmental Management, the Department of Natural Resources, the Department of Revenue, the Department of Transportation, and the Department of Veterans Affairs will see either no impact or minimal impact that can readily be absorbed by the agency.
As agencies continue to learn more from the federal government about how they are to implement the reductions to their funding, the state will continue to provide additional updates.
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