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.
Kenley said he’s already thinking about it. “We can’t let these things slip,” he said. “We have to keep our good position.”