State posts second straight month of better-than-expected revenue

After four consecutive months when tax receipts fell below projections last fall, the Indiana State Budget Agency tallied a second straight month of better-than-expected revenue in January, with $2.18 billion in from income, sales, casino and other taxes.

That number is about 1.8%, or nearly $40 million, more than what the budget agency projected in December.

Income taxes drove the overall increase, with collections up 4.7% more than the agency anticipated. Similarly, revenue from state gambling taxes also came in higher than expected, which offset lower-than-expected corporate tax collections.

So far in the 2025 fiscal year, the state has taken in $12.1 billion in revenue, which is within a percentage point of what the budget agency expected and what revenues were at this time in the last fiscal year.

The budget agency says September, January, April and June are the most important months for the collection of income tax.

The Indiana Legislature has kept a close eye on the state’s reserves this session as forecasts of increased Medicaid spending have led to more muted budget asks.