State Revenue Projections Adjusted Downward

Posted: Updated:
INDIANAPOLIS -

New Senate Appropriations Committee Chair Ryan Mishler (R-9) calls a reduction to the full fiscal year corporate tax revenue forecast "temporary" and says there are a number of reasons for it. The State Budget Agency has readjusted the corporate tax collections forecast to $774.8 million, compared to $949.2 million, as expected in April. The updated general fund forecast is now $15.4 billion, down from $15.6 billion in April.

Individual income tax collections were adjusted up slightly to $5.69 billion from $5.66 billion. Current collections in the state's general fund total just under $15.3 billion.

Indiana Office of Management and Budget Director Micah Vincent said "this forecast recognizes a decrease in corporate income tax revenue, which we've reported on over the past several months, and makes downward adjustments based upon federal economic data for wage growth. With this information, we will continue to carefully manage spending and keep Indiana in a strong fiscal position with the reserves needed to withstand a downturn in the economy."

Through the first five months of the state's fiscal year, total revenue collections are down nearly $150 million.

You can connect to the full slate of revenue forecast numbers by clicking here.

In a statement, Mishler said:

Overall, I’m encouraged to see that Indiana’s sales tax and individual income tax revenues are higher compared to last year.

Indiana has become a national leader in attracting companies that bring more jobs to our state. With that growth comes a period of reconciliation that reflects the temporary reduction in corporate tax revenue as originally forecasted for a number of reasons.

The new Administration has moved quickly in clearing out a backlog of tax appeals, resulting in more Hoosiers getting great government service and receiving the refunds they are due. In addition, with the uncertainty of the future of federal tax reform, many corporations are deciding to cash out any outstanding balance they may have with the state, rather than letting it carry over from year to year, which many have done in the past.

Following a recent change passed by the General Assembly, corporations paid the tax liability in the aggregate for their employees. Recognizing this change, the revenue forecast adjusts for that transfer, categorizing what used to be corporate income tax revenue as individual income tax revenue, which accounts for some of the growth in the individual income tax category.

The Indiana Economic Development Corporation has also done a fantastic job attracting businesses that create jobs in our state through the EDGE Tax Credit. More of those credits, which are not paid out until the jobs are created as promised, have been certified, so the forecast has adjusted for more of those to be paid out.  

The revenue forecast is a dynamic process that adjusts for the realities of our state’s revenue. These forecasts provide valuable information as we plan for the future, and provide the legislature with the information we need to react appropriately moving forward. Moreover, these numbers reiterate the importance of maintaining healthy reserves when revenues do not perform as forecasted.

  • Perspectives

    • Making Numbers Work Harder For You

      Sencha CEO Art Landro believes the world has created more data in the last two years than in the preceding 5,000, and that we'll probably create even more than that before this year ends. In every aspect of our lives, we're absolutely drowning in data.

    More

Subscribe

Name:
Company Name:
Email:
Confirm Email:
HTML
INside Edge
Morning Briefing
BigWigs & New Gigs
Life Sciences Indiana
Indiana Connections
INPower
Subscribe
Unsubscribe

Events



  • Most Popular Stories

    • Methodist Sports Medicine Acquires Bloomington Clinic

      Indianapolis-based Methodist Sports Medicine is adding to its portfolio. The company has acquired Bloomington Bone & Joint Clinic, though financial details were not disclosed. The two companies will officially merge to become Methodist Sports Medicine Bloomington in April.

    • IU Effort Sets Sights on Orange County

      Indiana University's Center for Rural Engagement will partner with Orange County for its second Sustaining Hoosier Communities project. Through the collaboration, more than 500 students in 15 courses will take part in work on economic, health and quality of life projects in the southwest central Indiana county throughout the academic year. Planned efforts include a community wellness initiative, an incubator kitchen and a youth artisan apprenticeship program.

    • Indy as Amazon 'HQ2' Finalist a 'Powerful Statement'

      The chief executive officer of the state's technology growth initiative is comparing efforts to land Indianapolis a planned, $5 billion Amazon.com Inc. (Nasdaq: AMZN) headquarters to the city's 2012 Super Bowl bid. TechPoint's Mike Langellier says Indy's inclusion on a list of 20 finalists makes a "powerful statement" to other companies looking for prime locations. Langellier said the city meshes with what Amazon is seeking in areas including...

    • Indianapolis Among Amazon 'HQ2' Finalists

      Seattle-based Amazon.com Inc. (Nasdaq: AMZN) has named Indianapolis one of 20 finalists for the location of a second corporate headquarters. The company accepted bids late last year for what it expects to be a more than $5 billion investment that could bring up to 50,000 jobs with it. Chicago and Columbus, Ohio were the other two Midwest cities still in the running. Amazon says its "HQ2" will be "a full equal to our current campus in Seattle."

    • New Nonstops For South Bend, Fort Wayne

      New nonstop flights are coming this summer to South Bend and Fort Wayne. American Airlines to restart operations at South Bend International Airport with twice-daily flights to Dallas/Fort Worth International Airport and Charlotte Douglas International Airport. The airline is also adding daily nonstop service between Fort Wayne International Airport and Philadelphia International Airport.