The Indiana State Budget Agency released its monthly report on revenue collection for the general fund – the first of fiscal year 2015 – on Wednesday, which showed a 1.7-percent dip in tax receipts compared to estimates.
The state brought in a total of $1.04 billion in July general fund revenue, a decrease of 0.5 percent – about $5.2 million – from the December 2013 state revenue forecast.
Although the earnings did not match projections, last month’s revenue was just over $2 million more than July 2013.
Sales taxes in July beat projections by $7.4 million, as well as taxes on individual income and race track casinos wagering, which exceeded the forecast by $3.9 million and $200,000, respectively.
But corporate tax and riverboat wagering revenue fell below projections, a combined $14.3 million – $13.8 million of which is accounted for by the lack of corporate tax earnings.
July’s corporate tax revenue fell 31.3 percent from July 2013, even though the December 2013 forecast accounted for a corporate tax cut that took effect July 1 of this year. The state is phasing down the corporate income tax rate to 4.9 percent by 2022.
John Ketzenberger, president of the Indiana Fiscal Policy Institute, said the small decrease in corporate tax revenue should not be a big concern for the state.
“It’s not a big deal, “ he said. “It is such a small percentage of the state’s overall budget. If they miss it by 50 percent in September, then there is reason for worry.”
Ketzenberger said that more than 80 percent of Indiana’s tax revenue comes from the tax on sales and individual income, which both highly outperformed the July predictions.