Hoosiers have another reason to be proud of their state, which has been ranked favorably in a recent measure of fiscal health and economic prosperity. Good fiscal health means the state is spending taxpayer dollars wisely, and won’t be likely to hike taxes. A new study from the Mercatus Center finds that Indiana, which has posted budget surpluses every year since the recession, is ranked 17th in fiscal health.
The report ranks all 50 states and Puerto Rico on five different variables related to responsible spending. Indiana ranks in the top five in the nation of both maintaining a low debt and keeping cash on hand to manage future potential risks, which can be attributed to cutting wasteful spending and passing responsible budgets.
One example of the fiscally responsible policies that are moving our state forward was the decision to pay off a Federal Unemployment Insurance Tax loan early. The move saved the state $327 million in federal penalties and helped to free up resources within the state for growth. By choosing to pay off debts rather than recklessly increase spending, Indiana is prioritizing taxpayers and our long-term economic health.
Yet the battle to keep our tax burden low never ends, and as the study shows Indiana still has room for improvement. When it comes to measuring how high taxes, revenues, and spending are in comparison to state personal income, Indiana ranks 23rd. Although middle of the ground, Indiana must stay vigilant against tax hikes that could potentially derail the clear signs of progress through responsible spending. Continued issue education and civic engagement will keep Indiana on the right path to economic prosperity.