The state revenue forecast due out April 16 will be lawmakers' last bit of guidance before finalizing Indiana's next two-year budget, which so far does not include the 10-percent income-tax cut that is Gov. Mike Pence's top priority.
An improvement over the December forecast could give Pence leverage heading into the final two weeks of the legislative session ending April 29, but economists predict there will be little change.
“When you balance everything out, it probably won't be much different than December,” said Bill Witte, associate professor emeritus of economics at Indiana University.
The Dec. 17 forecast predicted revenue would grow a modest 2.55 percent over the next two fiscal years, which begin July 1. The projection put fiscal year 2014 revenue at $14.66 billion and 2015 revenue at $15.09 billion.
The State Budget Agency issues a two-year revenue forecast every December and a revised forecast every other April, coinciding with budget-writing years.
The State Budget Agency issues a two-year revenue forecast every December and a revised forecast every other April, coinciding with budget-writing years.
Pence would like to lower the state tax rate from 3.40 percent to 3.06 percent over two years, an estimated savings to taxpayers of $795 million in that time. House and Senate leaders are concerned about the possible revenue reduction and have different priorities.
The House budget proposal included no income-tax break and increased spending on education and roads. The Senate would spend similar amounts in those areas, but also cut the income tax from 3.40 percent to 3.30 percent while eliminating the state inheritance tax and financial institutions tax.
The House budget proposal included no income-tax break and increased spending on education and roads. The Senate would spend similar amounts in those areas, but also cut the income tax from 3.40 percent to 3.30 percent while eliminating the state inheritance tax and financial institutions tax.
Without a much-improved forecast, a compromise could be difficult.
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