Indiana revenue grows, exceeds early prediction

The December Monthly Revenue Report for Indiana was released last week. The report data showed positive gains for Indiana that exceeded early predictions. Major tax revenues were up 1.6 percent from predictions, and other revenues were up 3.7 percent.

Both of these were gains of 9 to 10 percent compared to last year’s revenue.
Although the results were positive, Budget Director for Indiana Adam Horst said the gains really aren’t significant.

“The result for the month is roughly within a percent of what the target was or what the forecast was,” he said.

“It’s kind of on target with the forecast. The trends continue to see pretty good growth in sales tax. We continue to see the gaming revenue struggle.”

Gaming revenue consists of revenue collected at casinos, race tracks and similar establishments.

These dips or crests below or above forecast are caused by hard-to-predict variables, said Bill Witte, an IU economics professor. Witte said forecasters use a statistical model that includes personal income, as well as variables such as the New York Stock Exchange.

“One thing that could clearly improve the forecast was a stock market variable,” Witte said.

Horst said the revenue report for January will be more significant because it will more accurately portray any gains in holiday spending for the state.

“It’s kind of hard to draw any conclusions about how we’re going to end the year,” he said.

Indiana government is also in a legislative session, and it is a non-budget year, Horst said, meaning that they will essentially “stay-the-course” as long as revenues are around target each month.

Monthly revenues during 2013 will be of more importance, because there will be new legislators, Witte said.

Horst said December’s monthly revenue was near what was expected, but that the gains were a good sign.

“Every month we can exceed the forecast, even by a small amount, that’s obviously a positive thing,” Horst said.

Witte agreed.

“They’re not spectacular,” Witte said of the numbers, “but they’re not disastrous either.”