Indiana is on track to end fiscal 2008 June 30 with between $1 billion and $1.2 billion in reserves despite slightly smaller than expected collections in some tax categories, budget director Chris Ruhl said in an interview last week.

Part of that surplus comes from a new sales tax increase that took effect April 1, though the state did not begin to collect revenue until May 1. The sales tax hike to 7% from 6% was implemented to help offset a state-wide decline in property taxes due to recent reform legislation.

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