INDIANAPOLIS | Gov. Mike Pence has directed state agencies and universities to cancel an additional $51.5 million in planned spending after Indiana badly missed its November revenue target.
Last month, the state took in $908.1 million from all revenue sources but expected to collect $984.9 million. That's a shortfall of $76.8 million, or 7.8 percent.
Through the first five months of the budget year, state revenue is running $141.3 million, or 2.5 percent, below the revenue forecast, which predicted 2.5 percent growth compared to last year. Actual revenue is down $101.6 million, or 1.8 percent, year over year.
The main culprit is weak personal income tax revenue. It is $108.2 million, or 5.7 percent, below expectations for the July-November period, and $87.8 million, or 4.6 percent, less than the same period last year.
Corporate income taxes, revenue from casino wagers and admissions, inheritance taxes and alcohol taxes also are down compared to last year.
Sales taxes, the state's largest revenue source, is up $54.7 million, or 1.9 percent, year over year, but budget forecasters expected 3.9 percent growth. November sales tax revenue totaled $545.7 million. That was $23.1 million, or 4.1 percent, less than expected.
Pence ordered state agencies Monday to hold back another 1.5 percent ($25 million) of planned spending, on top of the 3 percent ($50 million) he cut earlier this year.
He said the reductions are necessary to maintain the state's $2 billion budget reserve.
In addition, universities are losing 2 percent ($26.5 million) of their funding. Pence also ordered the state plane be sold ($2.5 million) and postponed $2.5 million in planned spending on the Indiana Biosciences Research Institute.
Altogether, the two rounds of budget cuts have reduced state spending by $172 million.
"Fiscal integrity is the foundation of prosperity," Pence said. "The cost-saving measures we are implementing today will ensure that Indiana remains fiscally sound during these uncertain times."
The Republican governor did not say how the state's lackluster revenue will affect his agenda for the three-month legislative session that begins Jan. 6.
Pence last week called for more than $1 billion in additional tax cuts; more spending on early childhood education, cities, roads and veterans; and continued operation of the partially state-funded Healthy Indiana Plan, instead of opting for a fully federal-funded Medicaid expansion.