For the second time in only four months, the state is admitting it made a massive revenue error.
This one cost counties $206 million in revenue that they have been owed from January 2011 to now and which will be repaid with interest as of April 5. The first, announced last December, resulted in a $320 million windfall to the state’s general fund.
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Both resulted from programming errors, though of a different nature. The first involved electronic checks by corporations that were not properly accounted for in the state’s general fund; the new error comes from miscalculations of how much counties are owed in income tax collections.
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Due to the error, Marion County will be getting $33.8 million. Hamilton County will get $17.3 million, Hendricks County about $4.8 million, Johnson County about $3.8 million, Hancock County about $2 million, Shelby County just over $1 million and Morgan County about $3.5 million.
But with interest and additional distributions for cities, plus the higher revenues they can now expect going forward now that this problem has been fixed, the totals are even higher. Indianapolis Mayor Greg Ballard said in a statement that the city and Marion County will get $41 million for the City-County general operating funds. Combined, all taxing units in Marion County will get a total of $55 million, Ballard said.
“I am directing the City Controller to hold this unanticipated and unbudgeted revenue in reserve to help address our 2013 budget needs,” Ballard said. “This new money does not remove the pressure on us to continue to cut costs and find new savings, and it will require city and county agency heads and elected officials to live within their means and fight the urge to spend it now.”
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Spokesmen for associations that represent counties, cities and towns said the money will ease local budget situations, which have been stretched particularly since the state enacted property tax caps. And they applauded the state’s decision to have an independent set of eyes look at the state’s revenue system.
Horst said the discovery, which will drain funds from the state’s general fund, will not impact plans to put more money into full-day kindergarten and to provide for automatic taxpayer refunds. With other revenue collections exceeding expectations, he said, the state remains on track to give income taxpayers about $65 each as a credit on their taxes next year.
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