By  Chuck Schalliol, Ryan Kitchell, Chris Ruhl, Adam Horst and Chris Atkins

Current debates over road funding and other spending desires have once again put the spotlight on the state’s financial reserves. It may be tempting to forget the fiscal predicament Indiana faced before 2005, but we must remember the situation and the steps taken to put Indiana on solid financial footing.

Hoosier families know the importance of maintaining a strong savings account and spending less than they earn. Hoosiers deserve the same from their government. Indiana’s financial strength has led to economic growth, lower tax rates and job creation. Financial reserves also allow the state to invest in important priorities, such as the governor’s plan to use a prudent amount of reserves for roads and bridges. The state’s fiscal success has been recognized by vast improvements in national rankings and the best possible credit score.

States, like families, experience seasons of prosperity and adversity. During prosperous seasons, it’s tempting to think the good times will last forever and throw caution to the wind. Indiana’s history teaches otherwise.

Five periods of national economic decline have occurred between 1980 and 2009, typically once every six years, with significant job losses, wage stagnation and company closings.

States experience economic decline with severe revenue shortfalls. Often with little or no warning, money counted on to meet the state’s budget doesn’t materialize. The reason? The unemployed don’t pay income tax, companies that go bust pay no taxes, and families suffering job loss or wage cuts appropriately buy less and pay less sales tax. This is the worst possible time for government to increase taxes or cut important programs.

To help avoid tax increases and deep cuts to critical services, Indiana maintains financial reserves. Indiana’s reserves are currently about $2 billion, enough to fund the government for 48 days. As a point of reference, financial experts recommend families maintain three to six months of expenses in their savings accounts.

Keeping reserves is a challenge because of government’s inherent desire to spend. Despite this appetite to spend, the Mitch Daniels and Mike Pence administrations have built and maintained reserves by consistently spending less money than was collected in taxes. At times, this required spending less than was budgeted to keep the budget balanced as revenue fell.

Has the state’s savings account been useful to the citizens of Indiana? The answer is an unqualified “yes.” When the 2008–09 recession sent revenue collections into a tailspin, reserves provided Indiana collective security from tax increases and deep cuts to critical services. State reserves dropped $500 million in one year. The reserves served as a much-needed cushion to soften the blow of serious revenue shortfalls.

By contrast, the recession of 2000–01 caught Indiana government off-guard and flat-footed. The state’s $2 billion reserve (1998-99) was spent down by years of unbalanced budgets. So when the recession hit, the amount remaining in the savings account plummeted to nothing and worse than nothing to arrive at a nearly $800 million deficit. State government resorted to the desperate gimmick of delaying more than $750 million of budgeted payments to schools, local governments and universities. The state also raised sales taxes effective Dec. 1, 2002, just in time for Christmas.

It doesn’t have to be that way. Spending down reserves in good times is like the proverbial grasshopper who lazily enjoys the summer bounty with no thought of saving for winter. We only have to look to Illinois to see the impact of continuing these irresponsible financial practices. Let’s not repeat the mistakes of the past.

Fortunately for Hoosiers, Indiana has saved for winter under the Daniels and Pence administrations to protect citizens and taxpayers from the harshness of economic downturns. In 2014, the Standard & Poor’s rating agency judged Indiana and only five other states as best prepared to weather the next recession. The responsible leadership of the last decade established that protection and will maintain it.

Schalliol, Kitchell, Ruhl, Horst and Atkins were Indiana Office of Management and Budget directors between 2005 and 2015.