Indiana will see about $394 million less in its biennial revenue collections than projected.
The State Budget Agency unveiled its December revenue forecast Monday, which reveals that the state took in $13 million less in taxes than expected in November, putting it $150 million below target over the first five months of the fiscal year.
The majority of the deficit comes from corporate income taxes, which state lawmakers are still phasing down slowly.
“This forecast recognizes a decrease in corporate income tax revenue, which we’ve reported on over the past several months, and makes downward adjustments based upon federal economic data for wage growth,” Indiana Office of Management and Budget Director Micah Vincent said in a statement. “With this information, we will continue to carefully manage spending and keep Indiana in a strong fiscal position with the reserves needed to withstand a downturn in the economy.”
House Speaker Brian Bosma, R-Indianapolis, said that $150 million deficit is manageable. “It's not the first time we've been through a shortfall ... it'll be manageable,” Bosma said. “We've got a healthy surplus and we'll be good.” Indiana has about $1.8 billion in reserves.
The State Budget Agency readjusted the corporate tax collections forecast to $774.8 million, compared to $949.2 million it projected in April.
The updated general fund forecast is now $15.4 billion, down from $15.6 billion in April.
The forecast for individual income tax collections was raised to $5.69 billion from $5.66 billion. Current collections in the state's general fund total just under $15.3 billion.
Gov. Eric Holcomb signed the state’s new $32 billion, two-year budget in April. The budget funds key provisions in Holcomb’s agenda, including increased direct flights at Indiana airports, freeing up some funds in a $500 million trust to foster entrepreneurship and regional economic development efforts, and providing $9 million for pre-kindergarten education
Indiana holds triple-A ratings from the three largest rating agencies.