TheStatehouseFile.com
INDIANAPOLIS—Indiana took in more tax revenue than expected in the first month of the year, and legislators don’t plan on spending it anytime soon.
The State Budget Agency reported that in January that Indiana had $56 million more in revenue than projected in December when the 2019-2020 budget forecast was made and nearly $96 million more than the same period a year ago.
Revenue from sales taxes, corporate tax collections and gambling contributed to the increase in revenue with only individual income tax collections falling short of estimates by $27.5 million or 4.1%.
Overall, the general fund collections are nearly $82 million over what was forecast in December and up $368.4 million or 4.1% above what was generated in the previous fiscal year. The fiscal year runs from July 1 to June 30.
While some of that extra cash has already been allocated to pay for $291 million in construction projects for Indiana’s public universities, House Speaker Brian Bosma, R-Indianapolis, said Monday that lawmakers won’t be going on a spending spree with the new cash.
“We have to look at the long haul,†Bosma said. “I’m here for responsible fiscal preparation for our state, it’s one of the reasons we’re AAA rated.†Indiana currently has a AAA credit rating, which allows the state to borrow money at low interest rates.
Gov. Eric Holcomb has already signed House Enrolled Act 1007 into law which appropriated the money for the university construction projects. Of  the $291 million going to the capital projects, $266 million came from unexpected revenue in the last fiscal year.
House Minority Leader Phil GiaQuinta, D-Fort Wayne, said House Democrats tried unsuccessfully to use some of the money on teacher pay raises and other causes, but were rebuffed by the majority Republicans.
“We had some opportunities that were missed because we could have used those dollars to invest in Hoosiers, and it was a missed opportunity by the House Republicans,†he said.
Michael Hicks, professor of economics at Ball State University, said these one-time unexpected increases in revenue shouldn’t be used toward deep-rooted issues like teachers’ pay.
“Education expenses aren’t windfall expenses, and shouldn’t take windfall money,†he said, explaining that one-time unexpected revenue should be used for one-time projects, to keep the state from getting in the habit of borrowing for every project.
Victoria Ratliff is a reporter for TheStatehouseFile.com, a news website powered by Franklin College journalism students.
