Indiana taxpayers will get a $111 credit on their income-tax returns next year thanks to a new law that requires a taxpayer refund if the state’s surplus totals more than 10% of the budget.
The rainy-day fund holds $2.15 billion. The state will use a chunk of the money for contributions to pension funds and to provide $111 refunds to roughly 3.26 million eligible taxpayers.
“Past a point of rock-solid fiscal strength, it’s better to leave this money in the pockets of those who earned it than to let it burn a hole, as it tends to do, in the pocket of government,” Gov. Mitch Daniels said in a statement.
The 2011 law triggers an automatic taxpayer refund if the state’s reserves exceed 10% at the end of the fiscal year. In the future the threshold will be 12.5%.