The state of Indiana faces a projected $1.3 billion budget gap for the next two-year budget period beginning in July 2011 due to dwindling tax revenues caused by the ongoing recession. To close this gap, state officials will need to make spending cuts, raise taxes, or pursue a combination of both approaches. The economic downturn has significantly reduced Indiana's revenue from its two main tax sources - sales and income taxes - which account for 80% of the state's budget. Federal stimulus funds and spending cuts under Governor Daniels have helped address budget shortfalls so far, but those solutions are not sustainable for the next budget cycle given continued weak economic growth.