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Indiana officials step down after $205M in local taxes mishandled

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The head of Indiana's taxing authority tendered his resignation this week after it was discovered that $205 million in local income tax revenue hadn't been distributed to counties, the second such oversight in months found to have happened on his watch.

John Eckart, the Department of Revenue's commissioner, will step down at the end of the current tax season after seven years in charge of the agency, state budget director Adam Horst said at a news conference Thursday. He did not specify when, exactly, that would be.

Two other top revenue officials, Chief Information Officer Roy D. Gabriel and Chief Financial Officer Darrel Anderson, also left after the error was discovered, Department of Revenue spokesman Bob Dittmer said.

Horst blamed the problem on a programming error. A similar error caused state budget leaders to lose track of $320 million in corporate tax collections over four years. That error was discovered in December.

"It's all you can do at this point," Horst said, when asked about restoring public trust in the state's accounting.

The revenue department says the mishandled money will be distributed with interest to the 91 of Indiana's 92 counties that have local income taxes. Horst said the state is searching for an outside auditor to review the agency's procedures.

Marion County and the city of Indianapolis said it would receive an additional $41 million from the adjustment. Indianapolis Mayor Greg Ballard said the funds would be directed toward future budget shortfalls.

Hamilton County will receive $17.3 million in additional distributions, not counting interest, the state said. Hendricks County will receive nearly $5 million, Boone County will get nearly $4 million; Johnson $3.8 million; Morgan $3.7 million; Madison more than $3 million; Hancock more than $2 million; and Shelby about $1.1 million.

Indiana's Legislative leaders, Republican House Speaker Brian Bosma and Republican Senate President Pro Tem David Long, requested a say in who is selected for the audit and demanded that the findings be reported to the Assembly's budget leaders. Democrats initially requested an independent audit of the Department of Revenue last year after the $320 million error was discovered, but were rebuffed by promises the administration would conduct its own review.

Horst said he told Gov. Mitch Daniels about the problem Tuesday and alerted legislative leaders about the problem Wednesday. Daniels left on a private trip to Israel Tuesday and was not immediately available for comment.

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  • this is Tim
    Tim - you could play that same tape a dozen times over the past 7+ years - perhaps his people are sloppy!! Seems like it all happens under his watch - who is the boss? Better hiring practices atleast!!! cmon have a take dont throw blanks
  • its called checks and balances red dog
    you have to have checks and balances red dog!! it took wish tv8 to expose the poor work being done by DWD (dept of workforce development) no one stepped forward there. And your man Mitch didnt say anything to that either. Let me guess your a public servant and you were given your job by someone you know and didnt have any knowledge how to perform it before hand? If not then dont stand up for underqualified people - and ultimately the boss is responsible for those who mistake under them.
  • subject
    Well let see, the democratic wanted and independent audit and the Republican leaders of the senate and legislative did not want it but were rebuffed by promises the administration would conduct its own review. It sound like to me that they did not want no one to find out that money was misplace under the Republican watch. And Daniel is on a private trip to Israel and won't comment. Maybe he did not have anything to do with it but who is in charge of the state, Daniel
  • red dog stifle
    Red dog in answer to your smart assessment and inquiry some of us have been demolished by the arrogance and illegal activities by this administration.

    Mis-handling of money, awarding multi million dollar contracts for decades to friends and contributors and other clearly called out garbage has been winked at by the AG, the IG and the FBI.

    When it comes to common people calling out the state administration and their commissions wrong doing the state officials circle the wagons, protect their friends and keep right on handing out paydays. Some people calling out the messes even to the IBJ have been ignored and ridiculed as crazy people.

    So some of have tried so take your smurky laugh and put your smart aleck behavior to some good use. You clearly have no idea what you are talking about.

    Maybe the IBJ should start re-assessing some of the other complaints they have received about some of the commissions they refuse to look at as well.
  • I can do better
    Anyone with an acounting education and a little experiance could do better. A simple reconcilliation of the sources of tax and the funds available would have caught this error. This guy and whoever hired him had/has to go.
  • The Money and The Leader
    Hmmm... it seems a few are blaming Mitch for the error. Or for hiring people that were in charge when the error occurred. Mitch didn't cause the error, nor did the folks that resigned. But a good leader understands change is needed for appearance's sake and so 3 people have resigned. The money wasn't lost and no fraud was believed present. Quick decisive leadership was shown. So stop blaming Mitch for your newspaper being delivered too far away from your front door -- not everything is the Governor's fault.
    • This is insane
      @Reddog

      Just because we as citizen cannot do the job of running a state budget does not mean we shouldn't expect official that are experts in their field to accurately do their job. If a doctor did a poor job on a surgery, no one would say "oh well I can't do any better, so I guess it's okay the patient didn't live". Also, everyone in the state has been hurt by this error. You would have to live under a rock to not hear about all the budget cut backs in public safety and school funding. This effects everyone in the state.
    • I have to wonder about the postings that praise Mitchost Mitch is great

      I have to wonder about the postings which praise Mitch.

      He gave individuals tax increase as he reduced corporate rate.
      He gave those who use the toll road higher cost in selling a interstate and using the 80 years of income to "balance the budget" this year.
      He gave money to private schools claiming teachers are failures...but not the students and their parents. He hired IBM and fired IBM but Mitch is too important to testify about the need to fire IBM. He selected the friends of Mitch to represent the state of Indiana in the legal case. He selected the company to represent Indiana for the State Fair (and they are unlimited in the amount being charge) -- what happened to competitive bidding and Indiana's attorneys. He did build more jails and we do have more people in State Prisons...I'm not sure this is a good idea. He remove inheritance taxes so the filthy rich can pass down the kingdom. He removed union power so we can all work for less...anything for his corporate friends. He works to ignore the immigration problem, as business who hire for low wages want. The list goes no.

      With these facts....how can any anyone other than the paid political agents for Mitch continue to give praise? Perhaps wealthy business owner can love Mitch, but not the working people of Indiana. Yes, Mitch's press releases claim great results, but we are smart enough to know the truth?
    • Can I do it better?
      ReddogApril 5, 2012 1:57 PM
      -> Not seeing all you Hoosiers stepping up to say you can do it better...

      Perhaps not in this situation - and the state can't do anything about it until the lawsuit with IBM is settled, but I'll wager I can do a better job leading the task of the FSSA.
    • What a surprise
      How can anyone defend this type of incompetance? Mitch can not defend his leadership, just like when he was head of OMB. He claimed the war would not cost us anything, and he took us from a surplus to a deficit. The people of Indiana should have expected no less. The people who have commented on this article are true to their man, even when he is wrong.
    • Tax Error
      One more thing...tell me how many of you have been hurt from this? Thought so.
      • Tax Error
        Not seeing all you Hoosiers stepping up to say you can do it better...thought so. Unless you can do it better (which is a laugh) then stifle yourself. At least the admin is coming clean instead of playing politics like the democraps.
        • The Real Difference
          Like every organization with thousands of employees and multi-billion dollar budgets, errors have been made under the Daniels administration.  The key difference has been that Gov. Daniels has pushed for accountability and transparency, owning up to mistakes and making moves to correct them.  Mitch Daniels is breath of fresh air in a world filled with politicians that can only seem to sweep problems under rugs or blame others for problems, and people like "big b," "jj" and "Joe" who naively step in line to support them.
        • even more under Mitches watch
          How many Indiana officials have been axed or forced to resign under my man Mitch????? Or to be fair how many have been assigned or voted in on his coat tail then forced to go
        • Who is fooling who
          Mitch you are my hero. Your crack budgetary people have lost and found 525 million. You are the captian of this sinking ship. Instead of selling your book and telling everyone who will listen you do not want to be pres or vp, or going to Isreal, you should be watching your own state. I would laugh at this programing error, but instead I am crying. My man should resign like Sara P.
        • Daniels.....
          Good work Gov, under your watch the state had massive reserves.......except it wasn't really your money!

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