INDIANAPOLIS | Two years of scrimping and saving by Indiana's state government soon will put more than $100 in the pockets of most Hoosiers.
Gov. Mitch Daniels announced Tuesday that preliminary calculations for the 2012 budget year, which ended Saturday, puts the state's reserves at more than $2 billion, or about 14 percent of state spending.
Under a 2011 law, reserves topping 10 percent of spending trigger an automatic taxpayer refund, with half the excess going to pre-pay teacher pensions and the other half — at least $300 million — being returned to some 3 million income-tax payers.
Though Hoosiers shouldn't wait by their mailboxes for a check. Instead, Daniels said there will be a line on next year's 2012 income tax forms instructing taxpayers to deduct the refund from their taxes owed.
Taxpayers receiving a refund will get a larger one; taxpayers who owe the state will pay less. Joint filers will receive a refund worth twice the individual refund.
"There will be a double-digit discount for the typical Indiana taxpayer sharing in the economy dividend that comes from a strong state fiscal picture," Daniels said.
The exact value of the refund will be revealed late next week when Indiana's final budget year results are announced by state Auditor Tim Berry.
The bulk of Indiana's reserves are from state agencies that were forced to return a portion of their annual appropriations during the 2011-12 budget years.
Many Democrats have criticized the Republican governor for demanding budget reversions even from agencies with critical missions, such as the Department of Child Services. DCS returned $110 million, or 15 percent of its budget, in 2011, and $16 million in 2012.
"How many at-risk children are still waiting for services that could be funded with money in the governor’s vault?" asked House Democratic Leader Pat Bauer, D-South Bend.
The state also added to its reserves in December when the Department of Revenue found $300 million in 2007-11 corporate income tax revenue that never was transferred to the general fund, which pays for schools, roads and most state services. In addition, state revenue exceeded spending by $500 million.
A 2012 law changed the refund trigger for future budget years to require a reserve of 12.5 percent of state spending. Based on 2013 revenue and spending forecasts, a refund of less than $50 may be paid in 2014.
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