Indiana’s October revenue collections report from the State Budget Agency provides an abundance of charts and numbers. If you focus on just the small chart at the bottom of the second page, you will see the simple numerical evidence that our revenues are strong. Four months into the fiscal year, and for the first year of the two-year budget, Indiana’s tax collections are 10.5% above the projected revenues on which the budget was based. These numbers reveal higher than projected collections that came in last fiscal year after the new budget was finalized in April and before the fiscal year ended July 1.
Those fiscal year end revenues caused the state surpluses to exceed the appropriations by more than 12.5%, triggering – for only the second time ever – the automatic taxpayer refund statute put in place a decade ago. So under the statute, half of the excess monies will be directed to the teacher pension fund and half will be returned to taxpayers.
The statute doesn’t allow refunds two years in a row, but the continuing, surprisingly strong collections are quickly creating excessive surpluses again. While prudent fiscal analysts all know that these numbers can turn around just as unexpectedly, the excess revenues do lend support to those advocating tax cuts.
Bill Waltz is vice president of taxation & public finance for the Indiana Chamber. He is also an attorney and has been with the organization for nearly 17 years.
