CHICAGO — Indiana Gov. Mitch Daniels said Friday the state would tap its reserves to advance $620 million in residential property tax credits to all 92 state counties, many of which may be facing cash-flow deficits related to damage from recent storms.
The state will advance the payments within the next two weeks, said Daniels months before the counties would normally receive them.
"In years past, a bankrupt Indiana state government withheld money from schools and localities, in effect borrowing from them against their will," said Daniels in a statement released Friday. "Today's action to advance funds is the exact opposite, a prepayment in order to get cash where it's needed and protect localities from having to borrow money."
The payments are coming from the state's reserve fund, which is currently between $1 billion and $1.2 billion. The state closed out fiscal 2007 with a budget surplus of $1.2 billion.
The payments will serve as bridge funding until counties receive property tax payments. Many counties are late in sending out property tax bills, in part as they grapple with a new property assessment method that fully took effect in 2007. So far only six of the state's 92 counties have sent out spring bills, according to the governor's office.
Under the plan, Marion County, which includes Indianapolis, will receive just under $100 million, and Lake County will receive just under $83 million.
The announcement comes as officials continue to assess damage from weeks of severe storms, including flooding and tornadoes. Friday, the state's agricultural director said the flooding likely caused $800 million in damage, which would mark the worst agricultural disaster in the state's history.
Officials said they hope that federal assistance will also help replenish money that counties may be paying now for infrastructure repairs and other costs. Currently 37 counties are eligible for federal aid.
