Tighten Those Projections

Indiana Gov. Mitch Daniels last week called for another round of budget cuts after reports showed revenue collections coming in 8% below original forecast.

He said he also would ask the state’s economic forecasting firm to review its models, as revenues have come in below predictions for the third straight quarter.

“Nothing’s off the table right now, but let’s not act impulsively,” he said at a press conference Thursday. “Its very likely we’ll have to take more dramatic steps than we’ve taken right now.”

Most state agencies earlier this year cut their budgets by 10% to adjust for lower revenues. The state collected a total of $2.8 billion in tax revenue during the first fiscal quarter, $474 million less than during the fourth fiscal quarter of last year. 

Sales taxes, which makes up 40% of state revenue, was down $183 million compared to the same period last year and $71 million lower than state forecasts.

“We’re not going to turn prisoners out of prison early; we’re not going to close state parks,” Daniels said. “But again, we’re going to do things we’d much rather not do to protect Hoosiers from tax increases.”

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Indiana
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