2014 Indiana General Assembly

February state revenue badly misses mark

2014-03-07T17:30:00Z 2014-03-08T22:59:07Z February state revenue badly misses markDan Carden dan.carden@nwi.com, (317) 637-9078 nwitimes.com
March 07, 2014 5:30 pm  • 

INDIANAPOLIS | Gov. Mike Pence on Friday blamed brutal winter weather for February's dismal state revenue results, but that didn't placate the Indiana Senate's budget leader who sees repeated monthly revenue shortfalls as a worrying trend.

State revenue last month totaled $708.4 million, which was $54.1 million, or 7.1 percent, below the state revenue forecast.

This is the sixth time in the eight months since the state budget year began in July that revenue failed to meet expectations.

Indiana's 7 percent sales tax, the state's greatest revenue source, brought in $512 million in February. That's $19.7 million, or 3.7 percent, less than expected, and $13.7 million, or 2.6 percent, less than February 2013.

Individual income tax revenue also missed the mark at $121 million. That was a whopping $65.2 million, or 35 percent, below forecast, and $34.3 million, or 22.1 percent, less than last February.

The Republican governor, who is working to persuade the Republican-controlled General Assembly to cut tax rates further, said the monthly revenue miss is easily handled.

"Due to severe winter weather that affected Hoosiers all across the state, this revenue report was not unexpected," Pence said. "Our administration is confident that we will be able to manage budgetary resources in a way that preserves Indiana's fiscal integrity."

But state Sen. Luke Kenley, R-Noblesville, chairman of the Senate Appropriations Committee, said with two-thirds of the budget year already over, several trends have emerged that don't have easy fixes.

He pointed to the drop in cumulative income tax revenue, which is $117.7 million below target and down $39.9 million compared to last year, even though the state's unemployment rate declined to 6.8 percent in December from 8 percent in December 2012.

Kenley also noted "fading" riverboat casino tax revenue, down 22.1 percent compared to last year, and an all-sources revenue total that's $59.3 million, or 0.7 percent, behind the same eight-month period in 2013.

"It's very unusual that you'd be below the prior year," Kenley said. "That's sort of in contradiction to the overall picture of the national economy."

Kenley said the revenue results likely won't have much affect on negotiations during the final week of the legislative session, since lawmakers wisely pushed the start dates for most new programs under consideration more than a year out.

The House Democratic budget chief, state Rep. Greg Porter, D-Indianapolis, said the revenue report shows Indiana needs every dollar it can get, and the Republican plan to reduce taxes while the state budget hole grows is the wrong move.

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