Reducing Government Debt

Reducing Government Debt

Wednesday, February 5, 2020

This week the Indiana Senate passed House Bill 1007, which would eliminate almost $300 million in state debt and save Hoosier taxpayers $135 million by avoiding future interest payments.

This debt relief comes in the form of cash funding infrastructure projects which were already approved in the most recent state budget. We originally planned to pay for these projects with bonds, but after a one-time windfall due to federal tax changes, the state finds itself with a large enough surplus to fund these projects independently, instead of indebting itself.

This influx of money is not a yearly occurrence, so it’s important to use the money for one-time expenses. Using this money on recurring expenses such as salary increases for educators or public safety officers would be unsustainable, irresponsible and only result in a one-year bonus, leaving those individuals back where they were the next year when that money has been spent.

Indiana’s strong financial leadership has positioned us to accomplish many good things, like making record investments in schools and road improvements while continuing to pay down Indiana’s debt. In fact, the 2019 state budget increased education funding by $763 million over two years. When the legislature adopts a new budget in 2021, HB 1007 will have put us in an even stronger financial position going forward and allow us the freedom to invest in other areas.

The bill has passed both the Senate and House and has been signed into law by Gov. Holcomb.