Many states celebrate surpluses as Congress struggles with debt

As Washington stares at rising national debt and projected deficits for years to come, many states are faced with the opposite problem: whether to spend their budget surpluses and, if so, on what.

At least a dozen states ended fiscal 2011 with surpluses. Indiana reported one of the largest, with an extra $1.2 billion in its accounts. Gov. Mitch Daniels, a Republican, on Friday authorized bonus payments of up to $1,000 for state employees. An employee who “meets expectations” will get $500, those who “exceed expectations” will receive $750 and “outstanding workers” will see an extra $1,000 in their August paychecks.

“No state anywhere comes close to Indiana’s record of spending tax dollars carefully, with total savings over the last six years in the billions. Your spending efficiency has enabled us to stay in the black even as revenues plummeted,” said Mr. Daniels, who recently flirted with a run for the White House but ultimately stayed out of the race.

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