State revenue remains sluggish under Pence

2013-08-06T12:55:00Z 2013-08-07T11:34:03Z State revenue remains sluggish under PenceDan Carden, (317) 637-9078
August 06, 2013 12:55 pm  • 

INDIANAPOLIS | Republican Gov. Mike Pence regularly touts Indiana as the state that works, but all that work isn't bringing many bucks into the state's coffers.

July marked the the third time in the six full months of Pence's administration that Indiana's monthly tax revenue failed to surpass the state's revenue from the same month the year before.

The most recent similar stretch of repeated declines in year-over-year monthly revenue occurred in 2010, when state revenue cratered due to the Great Recession.

Total state revenue for July was $1.04 billion. That's $14.3 million, or 1.4 percent, below the state's revenue forecast. It's also $72.1 million, or 6.5 percent, less than what the state took in July 2012.

State Budget Director Brian Bailey attributed the drop to an extra payday last year that boosted income tax revenue for the month and distorted year-over-year comparisons.

He also said a new law directing 1 percent of sales tax revenue from the general fund to dedicated road funding reduced the state's monthly take by $5.9 million.

Sales tax revenue for July totaled $591.9 million, which was $10 million, or 1.7 percent, below the revenue forecast. The $319.3 million in income tax revenue was $12 million, or 3.6 percent, less than expected.

Inheritance tax revenue also began dropping last month in response to a new law approved by the Republican-controlled General Assembly and signed by Pence eliminating the tax retroactive to Jan. 1.

The state took in $32.7 million in inheritance tax from 2012 deaths during July, a 12.7 percent drop compared to July 2012.

Beyond the monthly revenue target misses, the inheritance tax elimination requires that Indiana take in an additional $193.7 million over the next two years to meet the revenue expectations used to craft the state's 2014-15 spending plan.

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