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State acts to soften sequester

Little, no tangible effect seen

– State agencies are making every effort to absorb administratively the cuts created by the federal sequestration, Gov. Mike Pence announced Monday.

The goal is to minimize the effect on programs and services Hoosiers rely on, he said.

“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 Indiana Office of Management and Budget.

In some cases, the cuts can’t be mitigated, however. Following a directive from the U.S. Department of Labor, federal unemployment benefits to 33,000 Hoosiers will be reduced by 10.7 percent beginning March 31.

Originally the state was going to suspend the benefits altogether but later retracted the decision.

Also, 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 mission requirements are still met.

The Pence administration also gave examples of programs that will be largely unaffected:

•The sequestration cut will eliminate $4.1 million in food aid from the state’s Women Infants and Children program. Because of Indiana’s low transportation costs, administrative cuts of $1.6 million and a declining caseload, Indiana will continue to provide full benefits to all recipients.

•The Department of Workforce Development will see funding for job-seeker services reduced by $1.1 million and GED remediation cut by $515,000. The state agency will mitigate the effect of those cuts with a discounted contract extension and a performance-based funding model.

•The Department of Labor will lose some federal matching money for the Indiana Occupational Safety and Health Administration and INSafe, but can minimize the cuts with other funding sources.

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 effect and are preparing to handle the cuts with as little influence 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 effect or minimal effect that can readily be absorbed by the agency, state officials said.