updated: 11/21/2012 12:44:52 PM
More than three million Hoosier taxpayers will be receiving a new tax credit next year. Governor Mitch Daniels announced the automatic taxpayer refund will be $111 for individual filers and $222 for joint filers. The refund was triggered when Indiana's budget reserves exceeded 10 percent of the state budget at the close of last fiscal year.
November 21, 2012
INDIANAPOLIS, Ind. - Governor Mitch Daniels said today that Hoosiers who file individual returns next year will receive a credit of $111 and joint filers will receive a credit of $222 because of the stateís automatic taxpayer refund (ATR).
"We insisted on a per capita refund for two reasons: first, maximum simplicity, as seen on the new tax form. Second, to provide the most relief to lower and middle income Hoosiers, for whom $222 may be meaningful right now," said Daniels. "Past a point of rock-solid fiscal strength, itís better to leave this money in the pockets of those who earned it than to let it burn a hole, as it tends to do, in the pocket of government."
Facts about the automatic taxpayer refund:
-Approximately 3.26 million eligible Hoosier taxpayers
-Total ATR amount for individual taxpayers is $360.6 million
-Typical taxpayer liability is $850; the taxpayer refund represents a median tax cut of about 13 percent. The credit will be applied when taxpayers fill out their 2012 income tax forms in 2013. Here is a link to how the language will appear on the form for 2012:
-There are about 335,000 taxpayers who will receive a refund in 2013 who otherwise would have owed taxes without the ATR
-About 890,000 taxpayers will receive at least a 25 percent income tax reduction
-About 460,000 taxpayers will receive at least a 50 percent refund (owe $222 or less)
-About 230,000 taxpayers will receive a 100 percent refund (owe $111 or less)
Indiana closed the 2012 Fiscal Year with reserves of $2.155 billion or 15 percent of the state's budget. In 2011, the Indiana General Assembly approved the governor's plan for an automatic taxpayer refund if the state's reserves exceeded 10 percent at the end of the budget year that ended on June 30. In future years, the reserve threshold will be 12.5 percent.
The total budget surplus was $721 million. The other $360 million has been used to strengthen pension funds: Judges Pension Fund ($90.2 million); Conservation, Gaming, and Excise Officers' Pension Fund ($14.6 million); Prosecutors' Pension Fund ($17.4 million); State Police Pension Fund ($31.7 million); and Pre-1996 Teachers' Retirement Fund ($206.8 million).
Indiana fiscal information:
-Indiana has its first Triple-A credit rating
-Indiana's expenditures have grown at less than one-quarter of the rate of the previous decade
-Indiana has the fewest state employees per capita in the country
-Indiana has paid down previous debt of nearly 53 percent
-Indiana repaid more than $750 million of debt previously owed to schools, universities and local governments
-Indiana repaid a $63 million loan to the Motor Vehicle Highway Fund that originated in the 1990s
-Indiana paid off the 50-year-old bonds on the Indiana Toll Road, almost $200 million worth
-Indiana has the third lowest debt per capita for state governments (State Budget Solutions, August 2012)
-Indiana has the second lowest debt per private sector worker (State Budget Solutions)
-Indiana has the third lowest debt as a percentage of gross domestic product (State Budget Solutions)
-Indiana has the lowest burden per household to fully fund public pensions in the country (The Revenue Demands of Public Employees Pension Promises," Robert Novy-Marx, University of Rochester and NBER and Joshua D. Rauh, Kellogg School of Management and NBER, June 2011, updated May 2012)
-Indiana has the smallest unfunded liability per capita for retiree health care of any state (Bloomberg, Pew Center on the States, U.S. Census)
-At 6.75 percent, Indiana's pensions have the most conservative investment return assumptions of any state and is the only state below 7 percent (National Association of State Retirement Administrators)
-Indiana's combined pension and long-term debt liability as a percentage of GDP is the 2nd lowest in the country (Moody's, January 2011)
Source: State of Indiana