By Cecil Bohanon in the Richmond Palladium-Item:
Back in 1998 the state of Indiana had over $1.3 billion in surplus funds in its general account. This was about 57 days of state spending. The state had total surplus funds of over $2 billion that was over 24 percent of its annual operating revenues. I remember the cries of the time: The state should not be a bank, social spending has been cut to the bone and must be increased, taxes should be cut in the presence of such a “structural” surplus, and, of course, education spending should be increased at all levels. Oh yes, I remember it well: I was cranking out spreadsheets to make a case for property-tax cuts.
Fast forward six years. The state of Indiana’s fiscal year-end report of June 30, 2004, was frightfully different. The surplus in the general account was a mere $200,000. This would cover about 10 minutes of state spending. Although the report showed the state had total surplus funds of over $500 million or about 5 percent of its annual operating revenues, this was all based on an accounting “trick” of payment delays. State payments originally scheduled in fiscal year 2004 were deferred to fiscal-year 2005. The close-out statement for 2004 included funds the state owed to schools and universities but had not yet distributed. Absent this accounting gimmick the state was technically bankrupt to the tune of nearly $180 million.
Over the last 10 years Indiana has slowly crawled out of its fiscal hole. This is truly remarkable as the economic downturn of 2008-2009 was much more severe than the downturn of the 2001-2002. The state now has just over $1 billion in surplus funds in its general account that would cover about 26 days of state spending. The state has total surplus funds of just over $2 billion which is just under 14 percent of its annual operating revenues.
We now hear the cries we heard 16 years ago. Every spending constituency insists it has been shortchanged and treated unfairly. Newspapers and blogs are full of stories of schools not repaired and social services not provided. My local newspaper’s editorial page chided the state for its “vast cash reserves.” I am reminded of the immortal words of the great Yogi Berra “déjà vu all over again.”
...
http://www.pal-item.com/apps/pbcs.dll/article?AID=2014307290007
Showing posts with label Budget News. Show all posts
Showing posts with label Budget News. Show all posts
Wednesday, July 30, 2014
Truth Report Budget Info for Local Taxing Units Available Online
From the Elkhart Truth:
Indiana just made it a lot easier to find out where your tax dollars are going – if you have internet access, that is.
The state recently unveiled www.budgetnotices.in.gov, a website that offers free information about county levies, budgets, property taxes, public meetings and other details about local finances.
Residents can use the site to view budget information for all taxing units in Elkhart County, including cities, townships, libraries and school corporations. Information can also by searched by address or with an interactive map.
Proposed budgets for 2015 are currently available online for Benton, Cleveland, Elkhart, Locke and Washington townships and Middlebury and Fairfield school corporations.
Starting in 2016, local governments will no longer be required to post budget notices in local newspapers. Instead, they’ll need to post that information on the new website, which was established with the passage of House Enrolled Act 1266 earlier this year.
It was developed to give residents a new way to learn about the local budget process and know when public hearings are scheduled for budget proposals, according to a news release.
People without internet access or who have trouble with the website can request paper copies of local government budget notices from theIndiana Department of Local Government Finance at 888-739-9826.
Monday, July 28, 2014
Palladium-Item Asks Who Benefits from State Surplus
From the Richmond Palladium-Item:
Let’s call word of the state’s cash reserves exceeding the $2 billion mark a case of good news-bad news.
Budget officials should be congratulated for taking fiscally prudent action to build the cash reserves up to such a lofty level, despite a $59.8 million drop in tax revenues over a 12-month period, and a 19 percent decline, that’s $85.3 million, in gambling revenue. Inheritance taxes and individual income tax revenues also fell.
Unfortunately, while the state is sitting on a pile of money, local schools and government units are slowly spending their cash reserves and rainy day funds to pay for normal expenses and operations. In the long term, that does not bode well for the future of many Hoosiers, schools, universities and municipalities.
It’s time the state stop congratulating itself on hoarding cash and share the wealth with Indiana citizens who depend on the state for vital services.
Just last week at the Daleville School board meeting, the board voted to change the way it can dip into its rainy day fund to pay for a wider variety of projects. It’s an appropriately named fund, since the board voted to spend $39,144 to coat part of a roof over the junior-senior high school to keep the rain out.
The board was forced to dip into the rainy day fund to pay for normal maintenance items because funding provided by the state is tight. Daleville is not the only school corporation facing this dilemma. Muncie Community schools has a rainy day fund of about $2 million, but there are plans to use a portion of the funds this year and next to pay for vital bus transportation for students.
Daleville and Muncie are not alone, as many other school corporations across the state — city and county governments, too — are forced to spend down cash reserves, if they have any remaining.
So the question arises: What happens when rainy day funds are depleted? Who will pay the bills to keep roofs leak free, college affordable and low-income Indiana citizens healthy?
Indiana, “the fiscal envy of the nation,” according to state Auditor Suzanne Crouch, is slowly strangling local schools and governments of needed funding.
...
http://www.pal-item.com/apps/pbcs.dll/article?AID=2014307270004&nclick_check=1
Let’s call word of the state’s cash reserves exceeding the $2 billion mark a case of good news-bad news.
Budget officials should be congratulated for taking fiscally prudent action to build the cash reserves up to such a lofty level, despite a $59.8 million drop in tax revenues over a 12-month period, and a 19 percent decline, that’s $85.3 million, in gambling revenue. Inheritance taxes and individual income tax revenues also fell.
Unfortunately, while the state is sitting on a pile of money, local schools and government units are slowly spending their cash reserves and rainy day funds to pay for normal expenses and operations. In the long term, that does not bode well for the future of many Hoosiers, schools, universities and municipalities.
It’s time the state stop congratulating itself on hoarding cash and share the wealth with Indiana citizens who depend on the state for vital services.
Just last week at the Daleville School board meeting, the board voted to change the way it can dip into its rainy day fund to pay for a wider variety of projects. It’s an appropriately named fund, since the board voted to spend $39,144 to coat part of a roof over the junior-senior high school to keep the rain out.
The board was forced to dip into the rainy day fund to pay for normal maintenance items because funding provided by the state is tight. Daleville is not the only school corporation facing this dilemma. Muncie Community schools has a rainy day fund of about $2 million, but there are plans to use a portion of the funds this year and next to pay for vital bus transportation for students.
Daleville and Muncie are not alone, as many other school corporations across the state — city and county governments, too — are forced to spend down cash reserves, if they have any remaining.
So the question arises: What happens when rainy day funds are depleted? Who will pay the bills to keep roofs leak free, college affordable and low-income Indiana citizens healthy?
Indiana, “the fiscal envy of the nation,” according to state Auditor Suzanne Crouch, is slowly strangling local schools and governments of needed funding.
...
http://www.pal-item.com/apps/pbcs.dll/article?AID=2014307270004&nclick_check=1
Tuesday, July 22, 2014
Herald-Bulletin Argues State Surplus Comes at Expense of Hoosier Well-Being
From the Anderson Herald-Bulletin:
State auditor Suzanne Crouch proudly reported Monday that Indiana’s cash reserves have grown to slightly more than $2 billion. The state added $106.8 million to its coffers in the fiscal year that ended June 30 despite a $59.8 million drop in tax revenues.
The sizable surplus is earning Indiana accolades from Republicans and national budget watchers. Crouse herself trumpeted the state’s success, celebrating that the state hasn’t had to raise taxes, is living within its means while keeping “prudent” reserves and continues to be “the fiscal envy of the nation.”
Undoubtedly, fiscal solvency is important for a state government. Debt is crippling many states, especially neighboring Illinois and California. Cash reserves can mitigate disaster should an economic crisis like recession hit the state.
But let’s be realistic. If Indiana is taking in $59.8 million less – blamed on declines in revenues from the riverboat gambling tax, inheritance tax and individual income tax – and still is able to save $106.8 million, that extra cash isn’t being plucked from a secret forest of money trees.
It’s being built on the back of spending cuts and reduced funding to the services Hoosiers need most.
...
Times Reports Data Hub Tracks State and Local Governments
From the Northwest Indiana Times:
Already a mainstay of businesses and baseball teams, "big data" has arrived in Indiana, which hopes to improve the effectiveness of state agencies and local governments — and Hoosiers can play along.
The new Indiana Management and Performance Hub website pulls together revenue, spending, goals, standards, reports and other data from every level of government in the state and displays the results using graphs and charts that show how well government works.
Want to know how much it costs to collect your taxes? It's on there.
For every dollar Indiana spent on tax collection between April and June it took in $245 in revenue. MPH also shows the Department of Revenue was much more efficient in October through December 2012, collecting $292 per dollar of expense.
Are you satisfied with the Bureau of Motor Vehicles?
The BMV earned a 96.1 percent customer satisfaction rating in April, probably because the average visit time — also on MPH — was just 13.45 minutes.
Think there's too much government in Lake County? There's a lot: 75 local units, including school corporations, employ 27,788 workers and collected $714 million in local taxes, according to MPH. In Porter County, 7,270 people working at 44 units took in $187 million in revenue.
MPH was developed by the Indiana Office of Management and Budget and the Office of Technology following an executive order issued in March and receipt of a $500,000 grant from the Lilly Endowment supporting the effort.
Gov. Mike Pence said he wanted the various state and local government management databases and transparency websites combined into a single, easy-to-use performance-monitoring center that could reveal overlooked efficiencies and track the progress of his "road map" goals.
The Republican said the MPH website at in.gov/mph continues Indiana's tradition of open and accountable government that "moves at the speed of business."
Monday, July 21, 2014
SBA Posts Fiscal Year Close Out Statement
FISCAL YEAR 2013-2014 CLOSE-OUT STATEMENT
- Fiscal Year 2013-2014 Close-Out Statement (July 14, 2014):
- Combined Statement of Estimated Unappropriated Reserve:
- Revenue Report
- History of State Operating and Reserve Fund Balances:
- Combined Statement of Estimated Unappropriated Reserve:
- Reversions:
- New Reversion Reports:
- Traditional Reversion Reports:
- New Reversion Reports:
- Miscellaneous:
Thursday, July 17, 2014
News Sentinel Asks Whether State is Hoarding or Being Fiscally Prudent
From the Fort Wayne News and Sentinel:
Despite bringing in nearly $60 million less that the year before, Indiana finished the fiscal year with a surplus of more than $100 million, which pushed its reserves above the $2 billion mark. If that seems like fiscal prudence to you, you must not be a politician whose first instinct is to spend.
Indianapolis Rep. Greg Porter, ranking Democrat on the Ways and means Committee, says it is disgraceful for Republicans to be proud or delighted with such a surplus when they aren’t running “state government in a way that benefits the people of Indiana.” Senate Minority Leader Tim Lanane says those reserves were earned by “hoarding tax dollars instead of spending them” on needed programs.
Well, yes, that’s one way to look at it. But most states have a different name for such “hoarded” money: a “rainy day fund,” which is the money responsible state governments set aside to tide them over in the case of an economic downturn.
All but two states have rainy day funds, and the only proper question to ask about one is whether it is a sensible amount or is too high or two low. States once typically set a rainy day limit of 5 percent of their yearly budgets. That amount proved inadequate during the most recent recession, so some are setting it at 10 percent now; a handful go to 15 percent or even higher.
Indiana’s $2 billion is about 7 percent of its annual budget. Doesn’t that seem about right, neither underfunded nor too well stocked?
The point is not to argue about specific budget cuts the state made. Maybe some were justified and some were too harsh. Those have to be defended or criticized on their own merits.
What’s important is to encourage the political class to have the right first instinct on fiscal matters, and that should always be to look at cutting spending before any other option is considered, especially a tax increase. That is the only way to keep government at a manageable level.
...
Tuesday, July 15, 2014
Journal-Gazette Reports State Ends Fiscal Year with $106 Million Surplus
From the Fort Wayne Journal-Gazette:
State coffers ended the year in the black thanks to agency spending cuts, Indiana budget officials reported Monday.
Fiscal year 2014 ended June 30 with an annual operating surplus of $106 million and reserves of $2 billion.
But to get there state agencies had to cut spending by about $150 million because tax revenues came in lower than expected.
In fact, fiscal year 2014 revenues were lower than the previous year, possibly due to state corporate and inheritance tax cuts lawmakers implemented.
“Due to the strong leadership of Gov. (Mike) Pence, our state’s fiscal health is strong and growing stronger,” said State Auditor Suzanne Crouch.
Pence ordered budget cuts in December, including a loss of $34 million to state colleges and universities. Other agencies also returned millions, including $27 million from the Family and Social Services Administration and $12 million from the Indiana Department of Correction.
“In order to help reach this magical two billion dollar number, the governor continues to order cuts from already lean state programs without regard for how they will impact citizens,” said Senate Democrat Leader Tim Lanane, of Anderson.
He pointed out that public schools are struggling financially, college is less affordable and Hoosiers who adopt special needs children get no state aid.
“What’s the governor’s plan for the surplus? More tax breaks for businesses? Another $50 taxpayer refund?” Lanane said. “Let’s not congratulate ourselves for hoarding tax dollars while so many of those taxpayers continue to struggle.”
Wednesday, July 9, 2014
AP: Democratic Candidate for State Auditor Wants Money Freed Up
By the Associated Press in the Kokomo Tribune:
The Democratic candidate for Indiana state auditor is arguing that more of the state's cash balance should be used to restore spending cuts made in the last few years.
Mike Claytor said Tuesday that more should be spent on the Department of Child Services and education, while preparing for payouts in a handful of lawsuits the state is facing.
Republican state Auditor Suzanne Crouch is set to detail the state's fiscal condition on Friday. Crouch and Claytor are facing off in November's general election.
Indiana has maintained a cash surplus in large part because of spending cuts made by former Republican Gov. Mitch Daniels through the recession. Democrats have argued the cuts should have been completely restored after the state's economy and tax collections began improving.
Monday, July 7, 2014
Ketzenberger: Tax Figures Paint Less Rosy Picture
By John Ketzenberger in the Indianapolis Star:
We'll know soon how Indiana's economy performed, thanks to a most reliable indicator — state tax revenue figures.
Indiana's fiscal year ended June 30, and staff at the Office of Management and Budget spent much of last week tallying the revenue and reconciling the expenses. The results are expected July 11 and they'll likely confirm fiscal 2014 was a so-so year, extending a downward trend over the past three years.
The state's five "major taxes" account for nearly 95 percent of its revenue, the economic sectors if you will. They are, in order of taxes collected, sales, individual adjusted gross income, corporate, riverboat wagering and racino wagering.
We'll start with the good news. Corporate tax payments are 11 percent ahead of last year through May and 15.6 percent better than revenue forecasters predicted in December. It's encouraging that this important overall economic sector is vibrant enough to exceed expectations, but it's also a very distant third in its contribution to Indiana's tax revenue, at 7 percent.
Sales tax collections are about where forecasters expected and 1.7 percent ahead of fiscal 2013. This sector, which can be interpreted as a sign of consumer confidence, makes up 47 percent of the state's tax revenue. It means the state has collected $104 million more in sales tax than last year.
Then there's the bad news. Individual adjusted gross income tax revenue is down on a year-over-year basis and down even more compared with what forecasters anticipated. In other words, the gain in sales tax was wiped out and then some by the $106 million decline in personal income taxes compared with last year.
A third of the state's tax revenue is derived from individual income taxes. So the decline hurts the bottom line, but it's also a sign of overall economic weakness. Taxes withheld from paychecks make up the majority of this category, which means Hoosiers have less buying power than they did just last year.
Gambling taxes have tumbled for years, yet collections are still less than forecasters expected. Through May, taxes on riverboat wagering are down 19 percent compared with last year, and 6 percent less than forecast. Consumers aren't betting like they used to, and many that still do are visiting new casinos in Ohio and Michigan.
Another measure of consumers' discretionary funds, gambling contributed as much to the state's revenue stream as the corporate income tax did 10 years ago. Indiana was an early adopter among states that saw gambling as a way to bolster tax revenue; I don't expect it will join Colorado and Washington in the current trend toward legalizing marijuana for the same purpose.
When Indiana's books are closed, tax collections likely will be level with last year's and just a little less than expected. With reserves, the state's finances remain strong, but the downward trend in revenue growth is a sign of economic weakness even when you factor the tax cuts that will chop revenue by more than $700 million a year when fully implemented.
Post-recession tax revenue jumped nearly 9 percent in fiscal 2011, but it's been all downhill since. Relatively robust 6.4 percent growth in 2012 dropped to 2.4 percent last year. Indiana's not alone, according to a recent report by the Nelson A. Rockefeller Institute of Government that showed individual income tax collections fell 7.1 percent nationally, much more than expected.
...
http://www.indystar.com/story/money/2014/07/06/ketzenberger-tax-figures-paint-less-rosy-picture/12231909/
We'll know soon how Indiana's economy performed, thanks to a most reliable indicator — state tax revenue figures.
Indiana's fiscal year ended June 30, and staff at the Office of Management and Budget spent much of last week tallying the revenue and reconciling the expenses. The results are expected July 11 and they'll likely confirm fiscal 2014 was a so-so year, extending a downward trend over the past three years.
The state's five "major taxes" account for nearly 95 percent of its revenue, the economic sectors if you will. They are, in order of taxes collected, sales, individual adjusted gross income, corporate, riverboat wagering and racino wagering.
We'll start with the good news. Corporate tax payments are 11 percent ahead of last year through May and 15.6 percent better than revenue forecasters predicted in December. It's encouraging that this important overall economic sector is vibrant enough to exceed expectations, but it's also a very distant third in its contribution to Indiana's tax revenue, at 7 percent.
Sales tax collections are about where forecasters expected and 1.7 percent ahead of fiscal 2013. This sector, which can be interpreted as a sign of consumer confidence, makes up 47 percent of the state's tax revenue. It means the state has collected $104 million more in sales tax than last year.
Then there's the bad news. Individual adjusted gross income tax revenue is down on a year-over-year basis and down even more compared with what forecasters anticipated. In other words, the gain in sales tax was wiped out and then some by the $106 million decline in personal income taxes compared with last year.
A third of the state's tax revenue is derived from individual income taxes. So the decline hurts the bottom line, but it's also a sign of overall economic weakness. Taxes withheld from paychecks make up the majority of this category, which means Hoosiers have less buying power than they did just last year.
Gambling taxes have tumbled for years, yet collections are still less than forecasters expected. Through May, taxes on riverboat wagering are down 19 percent compared with last year, and 6 percent less than forecast. Consumers aren't betting like they used to, and many that still do are visiting new casinos in Ohio and Michigan.
Another measure of consumers' discretionary funds, gambling contributed as much to the state's revenue stream as the corporate income tax did 10 years ago. Indiana was an early adopter among states that saw gambling as a way to bolster tax revenue; I don't expect it will join Colorado and Washington in the current trend toward legalizing marijuana for the same purpose.
When Indiana's books are closed, tax collections likely will be level with last year's and just a little less than expected. With reserves, the state's finances remain strong, but the downward trend in revenue growth is a sign of economic weakness even when you factor the tax cuts that will chop revenue by more than $700 million a year when fully implemented.
Post-recession tax revenue jumped nearly 9 percent in fiscal 2011, but it's been all downhill since. Relatively robust 6.4 percent growth in 2012 dropped to 2.4 percent last year. Indiana's not alone, according to a recent report by the Nelson A. Rockefeller Institute of Government that showed individual income tax collections fell 7.1 percent nationally, much more than expected.
...
http://www.indystar.com/story/money/2014/07/06/ketzenberger-tax-figures-paint-less-rosy-picture/12231909/
Monday, June 9, 2014
Times Reports State Likely to Fall Short of Annual Revenue Target
From the Northwest Indiana Times:
May tax revenue exceeded the state's reduced expectations, but Indiana likely still will fall short of its annual revenue target when the 2014 budget year ends June 30.
Last month, Indiana collected $1 billion. That's $11.5 million, or 1.2 percent, more than predicted by the revised revenue forecast.
At the same time, the May 2014 total was $200,000 less than May 2013 state tax revenue. While that's an improvement compared to April's year-over-year drop of $142 million, or 7.4 percent, it's still unexpected given the state's seemingly improving economy and job market.
Individual income tax revenue remains the unexplained weak link in the state's revenue picture.
Despite Indiana's unemployment rate dropping 2.3 percent since April 2013, income tax revenue is down $106.2 million, or 2.4 percent, compared to last year.
The $287 million May income tax revenue was $22 million, or 7.1 percent, less than forecast. Through 11 months of the state's budget year, income tax revenue is $143.1 million, or 3.2 percent, below expectations.
The income tax deficit last month was overcome by larger-than-expected sales and corporate income tax revenues.
May sales tax revenue totaled $592.8 million. That's $21.9 million, or 3.8 percent, above expectations. The $35.4 million May corporate income tax revenue beat expectations by $11 million.
Revenue from taxes on bets placed at riverboat casinos continued a year-over-year decline, coming in last month $5.7 million, or 11 percent, less than May 2013. Overall, riverboat wagering revenue is down 20 percent compared to last year.
Indiana must overcome a $50 million, or 0.4 percent, shortfall in June to end its budget year at its revenue target.
However, the state is not likely to make up the $94.9 million shortfall compared to 2013 total revenue, meaning Indiana probably will suffer its first year-over-year revenue decline since the Great Recession.
That drop largely can be attributed to the 2013 decision by Hoosier lawmakers to immediately eliminate the state's inheritance tax and cut the corporate income tax rate by 0.5 percent, reducing state revenue by about $160 million a year.
Saturday, June 7, 2014
May Revenue Data Released
The monthly revenue report of May 2014 state tax collections was released today.
Results
State general fund revenues for May were $1,005.6 million, which is $11.5 million (1.2%) above the estimate based on the December 20, 2013 forecast.
Sales tax collections were $592.8 million for May, which is $21.9 million (3.8%) above the estimate for the month.
Individual income tax collections totaled $287 million for the month, which is $22 million (7.1%) below the estimate for the month.
Corporate income tax collections were $35.4 million for May, which is $11 million (44.9%) above the estimate for the month.
Riverboat wagering revenue totaled $46.3 million for the month, which is $0.7 million (1.5%) below the monthly estimate. Racino wagering revenue was $11.4 million for May, which is $0.9 million (8.1%) above the estimate for the month.
Eleven months into FY 2014, total general fund revenues were $49.9 million (0.4%) below the estimate based on the December 20, 2013 forecast.
Commentary
Sales tax collections in May 2014 were $21.9 million above the monthly estimate and $20.9 million higher than in May 2013. When compared year over year, state general fund sales tax collections have grown by 1.7% or $104.3 million in fiscal year 2014.
Individual income tax collections for May 2014 were $22 million below the monthly estimate, and have missed the December forecast projection by $143.1 million, or 3.2%. When compared year over year, state general fund income tax collections have declined by 2.4% or $106.2 million in fiscal year 2014.
Corporate tax collections continue to beat the monthly estimate. Collections in May 2014 were $7.6 million (27.2%) more than in May 2013. When compared year over year, state corporate general fund taxes have grown by 11.3% or $81.1 million. Annual corporate collections year to date are $107.5 million (15.6%) higher than the December 20, 2013 forecast predicted.
http://www.ai.org/sba/files/revreport_may2014_commentary.pdf
Results
State general fund revenues for May were $1,005.6 million, which is $11.5 million (1.2%) above the estimate based on the December 20, 2013 forecast.
Sales tax collections were $592.8 million for May, which is $21.9 million (3.8%) above the estimate for the month.
Individual income tax collections totaled $287 million for the month, which is $22 million (7.1%) below the estimate for the month.
Corporate income tax collections were $35.4 million for May, which is $11 million (44.9%) above the estimate for the month.
Riverboat wagering revenue totaled $46.3 million for the month, which is $0.7 million (1.5%) below the monthly estimate. Racino wagering revenue was $11.4 million for May, which is $0.9 million (8.1%) above the estimate for the month.
Eleven months into FY 2014, total general fund revenues were $49.9 million (0.4%) below the estimate based on the December 20, 2013 forecast.
Commentary
Sales tax collections in May 2014 were $21.9 million above the monthly estimate and $20.9 million higher than in May 2013. When compared year over year, state general fund sales tax collections have grown by 1.7% or $104.3 million in fiscal year 2014.
Individual income tax collections for May 2014 were $22 million below the monthly estimate, and have missed the December forecast projection by $143.1 million, or 3.2%. When compared year over year, state general fund income tax collections have declined by 2.4% or $106.2 million in fiscal year 2014.
Corporate tax collections continue to beat the monthly estimate. Collections in May 2014 were $7.6 million (27.2%) more than in May 2013. When compared year over year, state corporate general fund taxes have grown by 11.3% or $81.1 million. Annual corporate collections year to date are $107.5 million (15.6%) higher than the December 20, 2013 forecast predicted.
http://www.ai.org/sba/files/revreport_may2014_commentary.pdf
Wednesday, June 4, 2014
Journal Gazette Reports Indiana Among States Reluctant to Borrow
From the Fort Wayne Journal-Gazette:
State governments are issuing debt at a slower rate than at any time in the past two decades and stockpiling cash surpluses in rainy-day funds, according to a new report, reflecting a wariness to new debt following a recession that forced states to borrow billions.
Indiana hasn't issued any new debt – instead paying its obligations off early.
The combined tax-supported debt of all 50 states grew by just $2 billion in 2013, to $518 billion, an increase of just 0.4 percent, while per capita debt issued by states declined 2 percent from the previous year.
That's far below the 6.5 percent average growth of the past decade and a fraction of recession-era peaks in 2004 and 2010.
About half the states saw their amount of net tax-supported debt decline from the previous year in 2013. Budget surpluses in most states allowed them to pay off debt without issuing new bonds, the report from Moody's Investors Service found. Even states with some of the biggest debts in the nation, such as California, cut their obligations by significant margins.
Indiana has been paying down its tax-funded debt for years – starting under former Gov. Mitch Daniels.
During Daniels' eight years in office, it dropped from $3.6 billion to $1.7 billion – including him burning the mortgages of several government buildings.
Since Gov. Mike Pence took over, that number has dropped to just under $1.5 billion.
Pence paid off the Indiana State Museum and state forensic lab as lawmakers provided for in the state budget. And he used additional surplus money to pay off the Miami Correctional Facility. Those three payments add up to $174 million in debt paid down under Pence.
“It reflects a desire on behalf of taxpayers to start getting out of debt,” said State Budget Director Brian Bailey. “Our instincts are to pay down the debt we have and hold the line on incurring more.”
Legislative budget leaders agree. That's why they provided $234 million in cash funding for state and university capital projects in the current two-year state budget. This is instead of bonding and adding to the debt.
Bailey said it also helps the state keep its AAA credit rating.
“A strong management position on debt shows you are fiscally responsible,” he said.
...
Monday, May 12, 2014
AP Reports Indiana Lawmakers May Study Declining Gaming Revenue
By the Associated Press in the Fort Wayne Journal-Gazette:
Indiana lawmakers this summer could consider how to address declining revenue from the state’s riverboat casinos.
Indiana Gaming Commission figures show the money the state collects from casino taxes has dropped from a peak of nearly $876 million in 2009 to about 752 million in fiscal 2013. Increased competition from new casinos in neighboring states is a big factor in the drop.
Senate President Pro Tem David Long tells the Evansville Courier & Press that he supports assigning the issue to a summer study committee when they are set up later this month.
Long says the committee would explore the declining revenue from riverboats. Riverboat revenue is down 7 percent, or $20 million, from projections for the fiscal year.
Friday, May 9, 2014
Times Reports New Jobs Fail to Boost State Income Tax
From the Northwest Indiana Times:
The improving Indiana job market isn't showing up in state income tax receipts, which last month came in nearly 15 percent below April 2013, despite a 2.8 percent drop in the state's unemployment rate over the past year.
Individual income tax revenue totaled $825.2 million last month. That's $23.6 million, or 2.8 percent, less than predicted by the revised state revenue forecast; and a whopping $142.5 million, or 14.7 percent, less than last April.
But even after dramatically scaling back that estimate in December, the state last month still failed to hit its income tax target.
Gov. Mike Pence's budget director, Brian Bailey, claimed the year-over-year drop in April income tax revenue was expected due to an extra Friday in 2013 that increased income tax deductions from Hoosier paychecks.
Bailey added that corporate income tax revenue is outperforming both the revenue forecast (by 12.5 percent in April; and 14.5 percent since last July) and the prior budget year (up 10.7 percent).
The $1.788 billion in total state revenue last month beat the revenue forecast by $13.8 million, or 0.8 percent. But it was $141.9 million, or 7.4 percent, less than Indiana collected in April 2013.
With just two months left in the 2014 budget year, which ends June 30, Indiana is on track to take in less money compared to the prior year for the first time since 2010 -- at the height of the Great Recession.
The elimination of some $160 million in annual inheritance tax receipts and a 21 percent drop in riverboat wagering tax revenue, along with weak individual income tax totals, are the leading causes of the state's revenue decline.
The improving Indiana job market isn't showing up in state income tax receipts, which last month came in nearly 15 percent below April 2013, despite a 2.8 percent drop in the state's unemployment rate over the past year.
Individual income tax revenue totaled $825.2 million last month. That's $23.6 million, or 2.8 percent, less than predicted by the revised state revenue forecast; and a whopping $142.5 million, or 14.7 percent, less than last April.
But even after dramatically scaling back that estimate in December, the state last month still failed to hit its income tax target.
Gov. Mike Pence's budget director, Brian Bailey, claimed the year-over-year drop in April income tax revenue was expected due to an extra Friday in 2013 that increased income tax deductions from Hoosier paychecks.
Bailey added that corporate income tax revenue is outperforming both the revenue forecast (by 12.5 percent in April; and 14.5 percent since last July) and the prior budget year (up 10.7 percent).
The $1.788 billion in total state revenue last month beat the revenue forecast by $13.8 million, or 0.8 percent. But it was $141.9 million, or 7.4 percent, less than Indiana collected in April 2013.
With just two months left in the 2014 budget year, which ends June 30, Indiana is on track to take in less money compared to the prior year for the first time since 2010 -- at the height of the Great Recession.
The elimination of some $160 million in annual inheritance tax receipts and a 21 percent drop in riverboat wagering tax revenue, along with weak individual income tax totals, are the leading causes of the state's revenue decline.
State Budget Agency Issues Revenue Data for April
The monthly revenue report of April 2014 state tax collections was released today.
Results
State general fund revenues for April were $1,787.8 million, which is $13.8 million (0.8%) above the estimate based on the December 20, 2013 forecast.
Sales tax collections were $605.8 million for April, which is $6.0 million (1.0%) above the estimate for the month.
Individual income tax collections totaled $825.2 million for the month, which is $23.6 million (2.8%) below the estimate for the month.
Corporate income tax collections were $223.1 million for April, which is $24.8 million (12.5%) above the estimate for the month.
Riverboat wagering revenue totaled $42.6 million for the month, which is $1.2 million (2.8%) below the monthly estimate. Racino wagering revenue was $10.7 million for April, which is $0.2 million (2.1%) above the estimate for the month.
For the first ten months of FY 2014, total general fund revenues were $61.2 million (0.5%) below the estimate based on the December 20, 2013 forecast.
Commentary
Sales tax collections in April 2014 were $6.0 million above the monthly projection and $17.7 million higher than in April 2013. When compared year over year, state general fund sales tax collections have grown by 1.5% or $83.4 million in fiscal year 2014.
Individual income tax collections for April 2014 were $23.6 million below the monthly estimate. Compared to last year, April 2014 was $142.5 million (14.7%) less than collections for April 2013. It was anticipated that April 2014 individual income collections would be lower than April 2013 collections due to timing related to the additional Friday of payroll withholding collections that impacted April 2013 revenue.
Corporate tax collections performed well above expectations for the third month in a row. Collections in April 2014 were $23.3 million (11.7%) more than in April 2013. Annual collections year to date are $96.6 million higher than the December 20, 2013 forecast predicted.
Results
State general fund revenues for April were $1,787.8 million, which is $13.8 million (0.8%) above the estimate based on the December 20, 2013 forecast.
Sales tax collections were $605.8 million for April, which is $6.0 million (1.0%) above the estimate for the month.
Individual income tax collections totaled $825.2 million for the month, which is $23.6 million (2.8%) below the estimate for the month.
Corporate income tax collections were $223.1 million for April, which is $24.8 million (12.5%) above the estimate for the month.
Riverboat wagering revenue totaled $42.6 million for the month, which is $1.2 million (2.8%) below the monthly estimate. Racino wagering revenue was $10.7 million for April, which is $0.2 million (2.1%) above the estimate for the month.
For the first ten months of FY 2014, total general fund revenues were $61.2 million (0.5%) below the estimate based on the December 20, 2013 forecast.
Commentary
Sales tax collections in April 2014 were $6.0 million above the monthly projection and $17.7 million higher than in April 2013. When compared year over year, state general fund sales tax collections have grown by 1.5% or $83.4 million in fiscal year 2014.
Individual income tax collections for April 2014 were $23.6 million below the monthly estimate. Compared to last year, April 2014 was $142.5 million (14.7%) less than collections for April 2013. It was anticipated that April 2014 individual income collections would be lower than April 2013 collections due to timing related to the additional Friday of payroll withholding collections that impacted April 2013 revenue.
Corporate tax collections performed well above expectations for the third month in a row. Collections in April 2014 were $23.3 million (11.7%) more than in April 2013. Annual collections year to date are $96.6 million higher than the December 20, 2013 forecast predicted.
Tuesday, April 8, 2014
IBJ Reports Tax Revenue Stabilizes in March; But Still Behind for Fiscal Year
From the Indianapolis Business Journal:
State tax receipts beat projections in March, but a key lawmaker said it’s not enough to clear concerns about Indiana’s finances.
Revenue topped $1.02 billion last month – about 1.4 percent more than estimates released last December. That’s also 11.6 percent more than in March 2013.
Senate Appropriations Chairman Luke Kenley, R-Noblesville, said that sounds like good news. “But it’s actually not,” he said. “Not if you dig deep into the numbers.”
For the fiscal year – which began July 1 – total tax collections are still about $71 million behind the estimates used to write the current two-year budget. And in March, sales tax collections – the state’s highest single source of revenue – remained behind projections.
“I’m scratching my head,” Kenley said. “The economy is not that bad and the stock market is crazy. But our revenues are just not robust.”
Kenley pointed to corporate tax receipts – which are 15 percent higher than projected this fiscal year – as the one positive sign. The increase in revenue is despite cuts in that tax rate. Kenley said that could be the result of companies shifting revenue to Indiana from states that have higher tax rates.
Gov. Mike Pence has already ordered agencies to cut back to try to accommodate the lower than expected revenue. And Kenley said Indiana government remains in good fiscal health, thanks to roughly $2 billion the state had in the bank at the end of the last fiscal year.
But to maintain that, state officials must be careful about future spending, he said. That will be important next year as lawmakers write the next two-year budget.
...
http://www.ibj.com/tax-revenue-stabilizes-in-march-but-still-behind-for-fiscal-year/PARAMS/article/47028
State tax receipts beat projections in March, but a key lawmaker said it’s not enough to clear concerns about Indiana’s finances.
Revenue topped $1.02 billion last month – about 1.4 percent more than estimates released last December. That’s also 11.6 percent more than in March 2013.
Senate Appropriations Chairman Luke Kenley, R-Noblesville, said that sounds like good news. “But it’s actually not,” he said. “Not if you dig deep into the numbers.”
For the fiscal year – which began July 1 – total tax collections are still about $71 million behind the estimates used to write the current two-year budget. And in March, sales tax collections – the state’s highest single source of revenue – remained behind projections.
“I’m scratching my head,” Kenley said. “The economy is not that bad and the stock market is crazy. But our revenues are just not robust.”
Kenley pointed to corporate tax receipts – which are 15 percent higher than projected this fiscal year – as the one positive sign. The increase in revenue is despite cuts in that tax rate. Kenley said that could be the result of companies shifting revenue to Indiana from states that have higher tax rates.
Gov. Mike Pence has already ordered agencies to cut back to try to accommodate the lower than expected revenue. And Kenley said Indiana government remains in good fiscal health, thanks to roughly $2 billion the state had in the bank at the end of the last fiscal year.
But to maintain that, state officials must be careful about future spending, he said. That will be important next year as lawmakers write the next two-year budget.
...
http://www.ibj.com/tax-revenue-stabilizes-in-march-but-still-behind-for-fiscal-year/PARAMS/article/47028
Monday, April 7, 2014
From the Northwest Indiana Times:
While March tax collections beat the state's revenue forecast, Indiana likely still will fall short of its annual revenue target when the 2014 budget year ends in June.
Last month, the state took in $1.03 billion. That's $14.5 million, or 1.4 percent, more than predicted. It's also $106.6 million, or 11.6 percent, more than Indiana took in last March.
Individual and corporate income tax revenue led the way with $330.5 million in individual income taxes topping expectations by $20.2 million, or 6.5 percent, and $82.1 million in corporate income taxes coming in $24.7 million, or 43.1 percent, higher than predicted.
However, sales taxes — the state's largest revenue source — failed to hit its target for the fourth time in the past five months.
Sales tax revenue totaled $521.6 million. That's $19.1 million, or 3.5 percent, less than expected, and just $100,000 more than last March even though more Hoosiers are working this year and presumably spending more money.
State Budget Director Brian Bailey said severe winter weather likely depressed March sales tax revenue growth as it has through much of the 2014 calendar year.
Weather also may have contributed to subpar revenue from taxes on riverboat casino wagers. The $39.4 million taken in the last month was $8.1 million, or 17.1 percent, below expectations.
Wagering taxes are down $64.7 million, or 21.4 percent, compared to the same nine-month period last year.
Overall, Indiana revenue is running $75 million, or 0.8 percent, below forecast through three quarters of the budget year.
State revenue likely will have to top expectations in April, May and June, or at least two out of three, to end the budget year at or above the revenue target used by lawmakers in crafting the state budget.
...
SBA Publishes March Revenue Report
The monthly revenue report of March 2014 state tax collections was released today.
Results
State general fund revenues for March were $14.5 million (1.4%) above the estimate based on the December 20, 2013 forecast and $106.6 million (11.6%) above collections in March 2013.
Sales tax collections were $521.6 million for March, which is $19.1 million (3.5%) below the estimate for the month.
Individual income tax collections totaled $330.5 million for the month, which is $20.2 million (6.5%) above the estimate for the month.
Corporate income tax collections were $24.7 million above estimate for March and $71.8 million (15.4%) above forecast year to date.
Riverboat wagering revenue missed the monthly estimate by $8.1 million and is $20.2 million below the forecast nine months into the fiscal year. Racino wagering revenue was $0.6 million (5.5%) below estimate for the month, and $1.9 million below forecast projections for the fiscal year.
For the first nine months of FY 2014, total general fund revenues were $75 million (0.8%) below the estimate based on the December 20, 2013 forecast and $47.3 million (0.5%) above collections for the first nine months of FY 2013.
Commentary
Sales tax collections in March 2014 were $19.1 million below target but $0.1 million higher than in March 2013. March sales collections were reduced by a one-time settlement payout in excess of $14 million. There was also likely a slight, severe weather impact on March sales tax collections. When compared year over year, state general fund sales tax collections have grown by 1.3% or $65.7 million. Absent the large settlement payout and the 1% sales tax redirection to the Motor Vehicle Highway Fund, state general fund sales tax collections for the first nine months of FY 2014 would have exceeded the same period in FY 2013 by 2.6% or $131.9 million.
Individual income tax collections for March 2014 were $20.2 million above target and $91.1 million (38.1%) more than collections for March 2013. Refunds normalized in March 2014 versus February 2014, which accounts for a portion of the 38.1% year-over-year increase in individual income tax collections. In addition, withholdings year to date have grown by 4.1%. Compared to the first nine months of FY 2013, individual income tax revenue has grown by $51.2 million (1.6%).
Corporate tax collections continue to exceed expectations. Collections in March 2014 were $20.7 million (33.7%) more than in March 2013. Annual collections year to date are $71.8 million higher than the December 20, 2013 forecast projected
http://www.in.gov/sba/files/revreport_march2014_commentary.pdf
Results
State general fund revenues for March were $14.5 million (1.4%) above the estimate based on the December 20, 2013 forecast and $106.6 million (11.6%) above collections in March 2013.
Sales tax collections were $521.6 million for March, which is $19.1 million (3.5%) below the estimate for the month.
Individual income tax collections totaled $330.5 million for the month, which is $20.2 million (6.5%) above the estimate for the month.
Corporate income tax collections were $24.7 million above estimate for March and $71.8 million (15.4%) above forecast year to date.
Riverboat wagering revenue missed the monthly estimate by $8.1 million and is $20.2 million below the forecast nine months into the fiscal year. Racino wagering revenue was $0.6 million (5.5%) below estimate for the month, and $1.9 million below forecast projections for the fiscal year.
For the first nine months of FY 2014, total general fund revenues were $75 million (0.8%) below the estimate based on the December 20, 2013 forecast and $47.3 million (0.5%) above collections for the first nine months of FY 2013.
Commentary
Sales tax collections in March 2014 were $19.1 million below target but $0.1 million higher than in March 2013. March sales collections were reduced by a one-time settlement payout in excess of $14 million. There was also likely a slight, severe weather impact on March sales tax collections. When compared year over year, state general fund sales tax collections have grown by 1.3% or $65.7 million. Absent the large settlement payout and the 1% sales tax redirection to the Motor Vehicle Highway Fund, state general fund sales tax collections for the first nine months of FY 2014 would have exceeded the same period in FY 2013 by 2.6% or $131.9 million.
Individual income tax collections for March 2014 were $20.2 million above target and $91.1 million (38.1%) more than collections for March 2013. Refunds normalized in March 2014 versus February 2014, which accounts for a portion of the 38.1% year-over-year increase in individual income tax collections. In addition, withholdings year to date have grown by 4.1%. Compared to the first nine months of FY 2013, individual income tax revenue has grown by $51.2 million (1.6%).
Corporate tax collections continue to exceed expectations. Collections in March 2014 were $20.7 million (33.7%) more than in March 2013. Annual collections year to date are $71.8 million higher than the December 20, 2013 forecast projected
http://www.in.gov/sba/files/revreport_march2014_commentary.pdf
Saturday, March 8, 2014
Budget Agency Releases February Revenue Report
The monthly revenue report of February 2014 state tax collections was released today.
Results
State general fund revenues for February were $708.4 million, $54.1 million (7.1%) below target based on the December 20, 2013 forecast, but $7.4 million (1.1%) above collections in February 2013.
Sales tax collections were $512 million for February, which is $19.7 million (3.7%) below target for the month – likely due to severe winter weather.
Individual income tax collections totaled $121 million for the month, which is $65.2 million (35%) below target for the month. For the first eight months of the fiscal year, individual income tax collections have missed the estimated target by $117.7 million or 3.8%.
Corporate income tax collections were $34.8 million above target for February and $47.1 million (11.5%) above target year to date.
Gaming revenues missed the monthly target by $5.4 million and are $13.3 million below forecast for the first eight months of FY 2014. Severe winter weather closed four gaming facilities for two to three days in January, which contributed to lower gaming collections for the month.
Commentary
Through the first eight months of FY 2014, state general fund revenues were $8,769.8 million, which is $89.5 million (1.0%) below target based on the most recent revenue forecast updated on December 20, 2013.
For the first time in FY 2014, the current month’s sales tax collections were below collections for the same month in FY 2013. Sales tax collections in February 2014 were below collections from February 2013 by $13.7 million (2.6%). Severe winter weather throughout the state in January very likely contributed to lower sales tax collections for the month.
Individual income tax collections for February 2014 were $34.3 million (22.1%) below income collections for February 2013. Year to date, withholdings increased by $149.7 million (3.9%) over the same time last fiscal year. However, the local income tax certified distributions and the transfers for the LOIT reserve are also $88 million more this fiscal year compared to the same time in FY 2013. Additionally, the Department of Revenue has processed more returns this February versus last February due to a delay imposed by the IRS in 2013, which shifted more returns to March and April 2013.
Corporate income tax collections for February 2014 were $34.8 million (94.7%) above target for the month and $47.1 million (11.5%) above target for the year. Compared to February 2013, corporate income tax collections in February 2014 were $69.0 million (97.3%) higher, and year to date are $29.5 million (6.9%) higher. Corporate income tax collections are significantly exceeding target for the month and the year despite reductions in the rate.
http://www.in.gov/sba/files/revreport_february2014_commentary.pdf
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