INDIANAPOLIS | An Internal Revenue Service delay in accepting income tax returns slowed payments of Indiana tax refunds last month and pushed state revenue well above expectations.
Indiana's January revenue totaled $1.426 billion, according to the State Budget Agency. That's $106.1 million more than the state revenue forecast and an 8.4 percent jump compared to last January.
State Budget Director Chris Atkins said Wednesday that last month's individual income tax revenue of $618.9 million, nearly 19 percent above target, and corporate income tax revenue at 107.5 percent above expectations will likely be offset by lower February totals, as delayed state tax refunds are paid out.
That word of caution didn't stop new Republican Gov. Mike Pence from cheering the results. Pence took office Jan. 14.
"I will tell you that we're encouraged by that number," Pence said. "It's certainly welcome news."
Pence's proposed 2014-15 budget is counting on state revenue to continue exceeding expectations to cover the costs of increased spending on education, Medicaid and other state programs while also providing Hoosiers a 10 percent reduction in their income tax rate.