Indiana Auditor Tim Berry closed the books on the state’s fiscal year today with the news that Indiana had held spending increases down to just half a percent, and as a result boosted the state’s reserves by $26 million.

“Indiana is in an enviable position, one of just a few states maintaining reserves, while not raising taxes or cutting education and public health programs,” Berry said. “If Indiana were a stock, investors would be buying strong. While not out of the woods yet, Indiana is positioned to withstand the continued economic downturn.”

Budgetary expenses were expected to increase by 3.9% during 2009. Since 2005 spending growth has been held to just 2.37%, well under the 5.88% annual growth that Indiana experienced in the eight preceding years.

While state reserves increased to $1.329 billion in fiscal 2009, they are expected to drop to $1 billion by June 2011 under the budget recently passed by the General Assembly. Maintaining responsible reserves is important to guard against disaster during economic downturns. This year alone, Indiana ‘s revenues fell $963 million from 2008 levels, and were $1.2 billion less than originally expected at the beginning of the year. The 2010 budget is calling for a 1.6% increase in revenue during the coming year.

Berry credited Governor Mitch Daniels’ prudent fiscal policies for keeping expenses down. “The Governor’s spending controls accounted for savings of a half billion dollars this year alone,” he said. More drastic steps to reduce spending in order to balance the budget weren’t needed thanks to $536 million in education stimulus dollars, and $348 million Medicaid stimulus expenditures, from Washington.