By Dan Spalding
WARSAW – A state legislative leader said Thursday he believes significant spending cuts might be needed to address Indiana’s financial stress caused by the COVID-19 pandemic.
The loss of revenues in a matter of weeks has created an anticipated shortfall of more than $900 million for the state, State Sen. Ryan Mishler said during an online meeting with local officials that was arranged by Kosciusko Chamber of Commerce.
Much of that money – roughly $800 million – is the result of pushing back the tax filing deadline to July, which will mean those monies won’t be available until the next fiscal year.
Mishler, a Bremen Republican who chairs the Senate Appropriations Committee, said it appears the state’s unemployment fund could run out in the next six to eight weeks, but that they can borrow money interest-free if that happens.
He said he doesn’t want to tap into the state’s $2.4 billion in reserves and is more inclined to look at reductions in spending rather than some kind of tax increase.
“We’re going to have to get creative if we don’t want to raise taxes,” Mishler said.
He said he also supports cuts in capital projects and spending for higher education rather than making cuts to school funding for K-12.
Freezing spending for schools for next year might be a worst-case scenario right now.
“I hate to use the word “cut” for K-12, but unfortunately, everything has got to be on the table,” Mishler said.
Mishler was critical of the decision by Congress to provide an extra $600 in additional money per week for unemployment benefits to those who lost jobs as a result of the pandemic.
He said the move has somewhat “backfired” and has become a disincentive for people to return to the workforce.
Mishler said he was told by the state’s Department of Workforce Development that anyone who is given a chance to return to work and does not should be reported by their employer.
“They cannot continue to draw the benefit if they’ve been offered their job back,” Mishler said.
“If they’re willing to take an entitlement when they have a chance to take a job, I don’t know if I want that person working for me,” he said.
Talk of extending the benefit “would be horrible for our economy” because it will make it more difficult to fill jobs and fuel an economic recovery.
“I hope that’s something Congress thinks about,” he said.
Asked if he might support a hike in the cigarette tax, Mishler said if that becomes an option, he would want to limit it to health-related costs.
He was also asked if legalizing marijuana and taxing it might be an option to generate revenues. He said he personally does not support such a move, but acknowledged that surveys are showing a growing amount of support for legalization. He estimated his district is close to evenly divided on the idea.
Mishler said he’s heard complaints about schools being closed and said if the state lifted the restrictions that schools would not move in that direction on their own for the current school year.
He advocates reopening classes in the fall and threw out the idea of a hybrid schedule – if necessary – in which there would be a mix of in-class instruction and virtual instruction so schools could reduce the number of students in classrooms.
A fallback plan, he said, would allow parents to opt-out of sending their youngsters to school if they have concerns and then have those students participate in a “virtual” environment.
Under that scenario, schools would have to be able to track participation and that credit would be lost if students don’t remain involved in the virtual classroom.
Those who don’t want to attend classes in person should not be allowed to participate in extracurricular activities, Mishler said.