Review the monthly revenue collections over the last several years and you will note that they tend to fluctuate above and below the budget projections. Typically, they balance out and come pretty close to the annual projections by the end of the fiscal year. That said, three months into this fiscal year, collections are up – by $113 million dollars over the budget projections for this first quarter of the new biennium budget. With three quarters left to play out in this first fiscal year, those positive numbers may not hold up, but they are nonetheless significant. The significance is tied to the fact that Indiana’s reserves are already high.
At around $2.3 billion, the existing surplus is well over the rough target of 12% of the annual expenditures reserve balance (generally thought to be a prudent range). The excess balance has prompted the Holcomb administration to propose spending down a portion of that surplus, around $300 million, to be used to cash fund capital projects that were authorized for bonding in the budget passed in April. That move requires the budget to be reopened, and that will spawn renewed debate over budget and project priorities. This quarter’s strong numbers will only add to the debate. And if the numbers remain well above the projections, it will almost assure that the budget becomes an issue, in a good way, next session … a non-budget year.
Resource: Bill Waltz at (317) 264-6887 or email: [email protected]