Growing ranks of dropout workers have nagged the economy throughout its recovery, and now Indiana’s budget forecasters feel they can’t ignore the trend. They recently revised their outlook on state revenue downward, partly because so many Hoosiers stopped looking for jobs.
Indiana’s fiscal picture is looking good with about $2 billion in cash reserves and a strong credit rating, but the next few years could leave the state in a fiscal pinch.
Tax receipts for the first quarter of the state's fiscal year have missed projections that were used to write the current two-year budget.
The report released by the State Budget Agency said Indiana's general fund revenue fell about 5 percent below the latest target.
Expectations that Indiana will collect $290 million more in taxes have Gov. Mike Pence's team optimistic they can win a $500 million cut in the state's personal income tax this session.
The state revenue forecast due out April 16 will influence the next two-year budget and possibly help Gov. Mike Pence sell lawmakers on his proposed 10-percent income-tax cut. Experts predict the numbers won’t be much different from those in the last forecast.
Gambling revenue for 2012 was down more than $110 million from 2010, and year-over-year revenue has tumbled in three consecutive years.
Indiana's state government is sitting on cash reserves of $2.15 billion following a year of continued budget cuts and improved tax collections.
Figures released Monday by the State Budget Agency show tax revenues for February came in less than expected by nearly $29 million, or about 4 percent. That follows a shortfall of about 3.5 percent for January.
Indiana's budget picture continued improving last month as the state collected $31 million more in taxes than planned.
The state said Tuesday it took in $12.3 million more in taxes than expected last month and that income and sales tax collections continued to improve through the end of August. However, gambling taxes from riverboat casinos came in $5.2 million less than expected.
The new budget year is off to a good start for Indiana’s state government with about $23 million more in tax revenue coming in than expected.
Indiana's state government collected $87 million less than expected in tax revenue during April.
Analysts told the State Budget Committee on Friday they expect the state to take in some $643.7 million more in fiscal 2012 and 2013 than anticipated in the previous revenue forecast.
State budget officials are seeking to recoup much of nearly $610 million overpaid to local governments in fiscal years 2009, 2010 and 2011 due to income tax revenue estimates thrown off by the lingering recession.
So far this fiscal year, collections are ahead of the state's forecast by $78 million, or 1.1 percent.
The state reports it took in $137 million more last month than during December 2009, marking a 13 percent increase in revenue collections over last year.
When lawmakers open their new session Wednesday, they won't have some of the advantages they had during the last budget-writing debate in 2009. This time around, there will be no $1 billion in federal stimulus money to keep the budget afloat.
The state Medicaid actuary projected Indiana’s share of the program’s costs will rise by about $1.46 billion this fiscal year, by about $1.84 billion in the 2012 fiscal year and by about $2 billion in the 2013 fiscal year unless some services are cut.
Indiana’s finances showed signs of life in November as growth in sales and individual income tax collections helped bring in $49 million more than projected in the most recent revenue forecast.
