Indiana has $200 million more coming in than originally estimated

By Shelby Mullis
TheStatehouseFile.com

INDIANAPOLIS — An unanticipated surplus in the state’s estimated revenue could be what Sen. Luke Kenley, R-Noblesville, calls an “appropriate cushion” for Indiana’s two-year budget.

The revenue forecast, presented to the State Budget Committee Wednesday by a bipartisan group of analysts, revealed nearly $200 million in additional revenues in fiscal years 2018 and 2019. The extra money was not anticipated in the December forecast.

“It’s just a small amount on a $16 billion budget that you just need to use that as petty cash and hold it on the side,” Kenley said.

Sen. Luke Kenley, R-Noblesville. Photo by Max Bomber, TheStatehouseFile.com.

But despite the expected growth over the next two years, Gov. Eric Holcomb is urging lawmakers to err on the side of caution. He said projections do not always mirror actual revenues.

Both chambers still have significant differences to resolve before a final version is ready to send to the governor’s desk at the end of the month.

Among the biggest differences between the bills are:

  • How to fund the state’s roads and infrastructure. The House plan would shift all sales tax on gasoline purchases to road funding and raise the cigarette tax by $1 to fill the gap left by the shift. The Senate version slashes the $1 cigarette tax hike and completely removes the provision to shift 100 percent of the sales tax on gasoline purchases to fund roads. Kenley said it would be illogical to enact the cigarette tax until it is needed to fund state health programs.
  • K-12 funding. The Senate allocated the greatest amount of money for K-12 education with an additional $358 million in funding over two years. Meanwhile, the House plan increases K-12 funding by only $273 million over the biennium.
  • On My Way Pre-K pilot program. Earlier this year, both the House and Gov. Holcomb allocated $10 million a year for the state’s pre-K pilot program, in addition to the current $10 million the program receives from the state. But the Senate version is proposing only an additional $3 million for the program annually.

Kenley said the revenue forecast does not show enough gain to justify moving the sales tax on gas to fund the state’s roads, but would instead just create a “big hole” in the budget. Instead, if an “enormous gain” was projected, then Kenley said the argument for the shift could be made.

Rep. Tim Brown, R-Crawfordsville, said the shift in the gas tax remains a major discussion point for lawmakers.

Rep. Tim Brown, R-Crawfordsville, responds to the revenue forecast, presented by a bipartisan group of analysts Wednesday. The revenue forecast predicted $200 million more coming to the state than originally estimated in December. Photo by Shelby Mullis, TheStatehouseFile.com

“I think what we’re talking about is philosophy,” Brown said. “Do you feel like when you fill up your tank and pay for gas, should all the tax you spend on that product be dedicated to roads? That’s philosophical.”

The biennial budget will continue to be up for debate as the differences are hashed out in a joint committee of House and Senate members. Both Brown and Kenley are on the committee, along with their Democratic counterparts Rep. Greg Porter of Indianapolis and Sen. Karen Tallian of Portage.

Shelby Mullis is a reporter for TheStatehouseFile.com, a news website powered by Franklin College journalism students.

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