A highly anticipated revenue forecast for the state of Indiana—which will impact budget negotiations next year— showed the state with 2017 general fund revenue projections of about $300 million, or 2 percent, below a previous forecast.
Top state lawmakers on the Indiana State Budget Committee received the bad short-term news Thursday at the annual budget forecast meeting, where a bipartisan group of state analysts presented their findings.
But they also got some good news about long-term trends that show the state is expected to grow revenue 2.9 percent in 2018 and 3.9 percent in 2019. That would bring in a total of $1 billion in projected new revenue during that time.
The 2 percent drop in projected 2017 general fund revenue from a prior December 2015 forecast is mainly due to a $265 million expected drop in sales tax revenue, which budget analysts said Thursday was due to lower gas prices.
Corporate income tax revenue for 2017 is also projected to be $54.6 million, or 5.7 percent, lower than previously projected; and riverboat gambling revenue is expected to be down $8.9 million, or about 3 percent.
The report follows top lawmakers sounding alarm bells over the next two-year budget after year-to-date revenue collections in the state’s general fund were 1.6 percent, or $75.7 million, below state forecasts as of October.
The Indiana General Assembly will start meeting in January to craft the 2017-2019 budget.