Hoosier State Reduces Debt by More Than Half in 8 Years

By Scott Sarvay

October 17, 2012 Updated Oct 17, 2012 at 5:49 PM EDT

Indianapolis (www.incnow.tv) - Governor Mitch Daniels announced Wednesday that the state of Indiana has reduced its debt by more than half in 8 years.

At a ceremonially burning of 10 mortgages of state owned facilities, which include the Government Center South and North buildings, Senate Street Parking Garage, Washington Street Parking Garage, the White River State Park, Pendleton Juvenile Correctional Facility, Rockville Correctional Facility, McCarty Street Warehouse in Indianapolis, PEN Products Warehouse in Plainfield and the New Castle Correctional Facility Annex in New Castle.

Since January 2005, the state has reduced its outstanding debt from $3.6 billion to $1.7 billion, a decrease of more than 50 percent.

Gov. Mitch Daniels said, “It's a combination. We've done a lot of refinancing of debt, which has freed up some money, but the continued strength of the state surplus, which is still forecast after this action, is still forecast to be $2 billion + at the end of the fiscal year next June. This has just enabled us to do what's smart and that's getting rid of old expensive debt more quickly.”

Major contributors to the state’s debt reduction include:
- $244 million in revenue collections from the tax amnesty program of 2005-06
- Immediately paying off $198 million in Indiana Toll Road bonds with proceeds from the lease of the Indiana Toll Road
- $266 million in savings from outsourcing functions such as food services in correctional facilities and printing and mail services for state government employees
- The combined spending on common items to better leverage the state’s purchasing power
- Renegotiating contracts for products and services
- developing better billing and collection procedures

Other fiscal facts about Indiana:
- Indiana has maintained its first Triple-A credit rating since being awarded in 2008
- Indiana's expenditures have grown at less than one-quarter of the rate of the previous decade
- Indiana has the fewest state employees per capita in the country
- Indiana has the third lowest debt per capita for state governments (State Budget Solutions, August 2012)
- Indiana has the second lowest debt per private sector worker (State Budget Solutions)
-Indiana has the third lowest debt as a percentage of gross domestic product (State Budget Solutions)

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