Gov. Daniels announces budget surplus, refunds for taxpayers
A preliminary look at fiscal data shows Indiana will close the 2012 Fiscal Year, which ended June 30, with reserves of more than $2 billion and an annual revenue of more than $500 million than annual expenses.
Because of the surplus, Gov. Mitch Daniels said Tuesday Indiana taxpayers will receive a refund of at least $100 next year, in compliance with state law requiring some of the extra funds be reimbursed to Indiana residents.
Single filers can expect a tax return of more than $100, Daniels said at the Statehouse Tuesday, while joint filers can expect a credit of more than $200.
“Thanks to this amount there will be a major infusion of money into Indiana’s pension funds, which are already the strongest in the country, and the first automatic taxpayer refund in state history,” Daniels said at the press conference.
With reserves totaling at least 14 percent of the state’s budget, most Hoosier taxpayers will receive their first automatic taxpayer refund when they file state taxes in 2013, according to a press release.
The Indiana General Assembly approved Daniels’ plan for an automatic taxpayer refund in 2011.
The Office of Management and Budget and the Auditor of State’s office will provide the official report in mid-July. Exact refund figures will not be announced until fall after estimates are calculated on how many tax returns qualify, according to the release.
Last year’s median income tax payment was $819, Daniels said, so the typical Indiana resident will be refunded an amount of more than 10 percent.
“What we can say today is we have double-digit discounts for the typical Indiana taxpayer,” Daniels said.
While half of the excess will be returned to taxpayers, the other half will go toward the state’s pension funds. Indiana’s pension funds, which the press release said are already rated among the nation’s most secure, are expected to top $300 million.
While Daniels said this revenue uptick hints toward a stronger Indiana economy, he said the national economy “continues to struggle and could plummet again for all we know.”
“Our first job has always been to protect Hoosiers against a catastrophe that is happing all around us, right next door to us in a couple places,” Daniels said. “Even after seven years with the economy the way it is, there are always better ways
During the meeting, Daniels was questioned about a $2 million bill the state owes the federal government to cover unemployment compensation checks to Hoosier workers.
But that fund is separate from the state’s general fund, Daniels said, so the excess allowing for refunds could not be distributed to the federal government.
With the upcoming general election in November, Daniels’ governorship will soon fall into the hands of Republican Mike Pence or Democrat John Gregg. Daniels said his administration will leave further decision-making regarding the surplus up to his successor.
“Every Hoosier should be grateful for the fiscal stewardship of the Daniels Administration, but we can’t treat this as an opportunity to grow government,” Pence said in a press release. “Instead, we should use our position of strength to grow our economy and continue to practice the fiscal discipline necessary to make Indiana the state (that) works.”
Daniels said he would not make suggestions as to what his successor should do with the strong financial picture.
“But the point is they’ll have flexibility to invest, spend, cut taxes, for some a mix of all of those,” Daniels said.
Gubernatorial candidate Gregg said in a press release his campaign has long focused on tax cuts for all Hoosiers to create Indiana jobs. In order to do that, Gregg said citizens need to know exactly how much money the state has in reserve through an
“After all,” Gregg said, “Hoosier families don’t write checks without knowing how much is in the bank. Their government should do the same.”
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