Indiana budget outlook shows bigger-than-expected tax revenue jump

Indiana’s state tax collections are expected to bounce back even stronger than expected from the pandemic recession.

A new state tax revenue forecast given Thursday to state legislators projects those collections going up by more than 4% in each of the next two years. That could mean about $2 billion more available for the new two-year state budget being completed by legislative negotiators after the last forecast in December projected growth between 2% and 3%.

Republican budget writers will likely face pressure to further increase school funding and the amount of money going to other state programs.

The latest budget proposal endorsed by the Senate this week would increase overall school funding by 1.2% the first year and about 3% the second year, slightly more than a plan that the Republican-dominated House endorsed in February.

Those plans include a contentious expansion of the state’s private school voucher program. Democrats have criticized the budget plans for doing little to directly boost the state’s lagging teacher pay or take up recommendations from the teacher pay commission appointed by Gov. Eric Holcomb.

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