Indiana monthly revenue falls short of projections for first time in year

For the first time in nearly a year, Indiana’s revenues didn’t exceed projections, but rather fell short due to repealed taxes and delayed tax collections.

After a string of several months with reported revenue coming in higher than the December 2021 forecasts predicted, September’s sum came in at $1.9 billion, or $82 million (4.2%) less than predicted. The last time revenue didn’t meet expectations was September 2021, when collections missed the mark by 0.1%.

The September 2022 revenue also fell short of last September’s totals by $29.7 million, 0r 1.6%.

The state report noted that collections were staggered due to a delayed income tax payment process combined with the repeal of the utility receipts tax and utility services use tax.

“With approximately $70 million of income tax collections delayed to October, year-to-date General Fund revenues would have totaled $4,981.9 million, which is $188.8 million (3.9%) above the December 2021 revenue forecast and $362.1 million (7.8%) above revenues through the same period in the prior fiscal year,” the report said. “Excluding about $100 million of potentially temporary positive revenue impacts, General Fund revenues may be interpreted as approximately $90 million above the December 2021 revenue forecast.”

That $70 million—$64 million in individual income tax collections and $6 million in corporate tax collections—will be collected in October.

Hoosiers with outstanding tax obligations or other state government debts didn’t receive the automatic taxpayer refund, but rather had that money applied to what they owed. This brought $90 million in individual income tax collections in August and September combined. Of that, $34 million went to other agencies so October and November collections will have a negative $34 million impact.

This change in collections, as well as the future loss attributed to the automatic taxpayer refund, is due to legislative changes made earlier this year and shouldn’t carry forward through the full fiscal year, the report said.

Sales and gas tax collections held steady, performing slightly better than anticipated. Together, the combined sales tax collections were $884.3 million, $27.2 million (3.2%) above predictions.

Tax collections from riverboat wagering continued their downward slump, totaling $7.1 million, or $10.2 million (58.7%) below the monthly estimate and $12.6 million (63.9%) below September 2021 collections. Racino wagering totaled $10.2 million, $800,000 short (7.7%) and $100,000 (1.3%) below the previous year.

The Indiana Capital Chronicle is an independent, not-for-profit news organization that covers state government, policy and elections.