Tax Revenue Below Expectations For Sixth Time This Fiscal Year

Indiana tax collections came in below expectations last month, the sixth time this fiscal year that revenues have missed the mark. 

Tax revenues were just barely below projected levels in January, about $2 million off the mark.  Collections were dragged down by sub-par months from both sales and individual income tax revenues.

Through eight months of the fiscal year, total collections are more than $90 million less than expected, significantly hurt by individual income tax revenues that were more than $131 million below projections. 

Gov. Mike Pence cited repeated collection shortfalls when he preached caution in budget-writing.  Senate budget architect Luke Kenley says he shares that caution, noting the continued failure to meet projections is problematic.

“We’re going to have another revenue forecast that we’ll do in April just before we adopt our final budget and you might see me be a little more cautious than the House," Kenley said. "I’m concerned that when April shows up that if we had to make a lot of cuts at that time, it could be a lot of pressure on everybody.”

The House Republican proposed budget created budget reserves of about 11 percent, while Pence’s budget proposal stored away hundreds of millions more, keeping reserves near 13 percent.