CHICAGO – Indiana lawmakers received good revenue news ahead of Friday's deadline to reach agreement on a fiscal 2018-2019 budget.
The revenue forecast late last week raised general fund tax estimates by $107 million for fiscal 2018 which begins July 1 and by $94 million for the second year of the next biennial budget.
The state now expects $15.6 billion in general fund revenue in the next fiscal year and $16.2 billion in 2019. The revised estimates mark less than a 1% increase from a December projection.
The last formal estimate from the State Budget Committee was released in December and those figures were used to craft the proposed budget. The increases may not immediately change proposed spending because the latest forecast still shows revenue this year lagging budgeted levels.
The latest estimates lowered a December projected $300 million shortfall in the current biennium to $254 million.
“While we are seeing moderate growth in revenues across our state, we must be cautious about the fact that projections have not always mirrored actual revenue experience,” Gov. Eric Holcomb said in a statement.
A conference committee of House and Senate members are hashing out their differences on a new budget with a goal of Friday to reach agreement.
The Senate recently passed a $32.1 billion budget that differs from the House version approved in late February on some spending and tax issues. The Republican-controlled legislature is set to adjourn later this month.
A notable difference between the two is a $1-per-pack increase in the state’s tax on a pack of cigarettes which the House included but the Senate did not. The House version would use revenue from the cigarette tax hike to plug a $300 million left by its plan to shift gasoline sales tax revenue to road funding. The Senate version lacks the shift.
The Senate version lacks Holcomb’s proposal to use the state’s $500 million Next Generation Trust Fund to fund investments in entrepreneurship and to support early-stage and mid-size Indiana companies. The House agreed to use a portion. Senate leaders said the issue will remain on the table for discussion during the conference committee.
The two plans also differ on the level of education funding allocated over the next two years, with the Senate package providing an additional $358 million and the House offering $273 million.
The state closed out fiscal 2016 with a structural surplus of $50.6 million, $545 million in its rainy day fund, and $2.24 billion in various state reserve accounts. Indiana holds triple-A ratings from the three largest rating agencies.