The revenue report showed a $1.9 million shortfall for February which could potentially force the General Assembly to re-evaluate projected spending during the second half of this year’s ?session.
“Due to severe winter weather that affected Hoosiers all across the state, this revenue report was not unexpected,” Gov. Mike Pence said in a statement. “Our administration is confident that we will be able to manage budgetary resources in a way that preserves Indiana’s fiscal integrity.”
Though a single month of shortfalls does not have a significant effect on the overall budget, this month’s report fits into a pattern of faulty revenue predictions.
Budget projections have consistently overestimated revenue collection for the last fiscal year, with six out of the past eight months showing budget shortfalls, according to data from the Indiana Department of Revenue’s website.
House Bill 1001, the state budget, is currently being debated in the Senate Appropriations Committee. The pattern of revenue shortfalls could press the Senate to rein in spending on the House plan.
“You might see me be a little more cautious than the House,” Sen. Luke Kenley said. “I’m concerned that when April shows up, that if we had to make a lot of cuts at that time, it could be a lot of pressure on everybody.”
The Senate Appropriations Committee, chaired by Kenley, will use the new ?predictions to make determinations on the House budget.
The Senate budget will be tighter than the House budget, with particular interest in items that would permanently become part of the budget, Kenley said in the first Senate budget hearing.
A new budget is to be approved by the legislature every two years, according to Indiana state law.
A major budget consideration under question this year is school funding formulas, which could be disrupted by the revenue ?reports.
Projected revenue collections are used by legislators to determine government spending for the next year. Shortfalls could threaten existing programs and inaccurate predictions could lead to budget shortfalls and programs being underfunded as the year goes on.
The majority of the shortfall was the result of poor income and sales tax collections, the report reads.
Income tax revenues were $6.6 million below estimates and sales tax revenues were $19.2 million below ?estimates.
The revenue blow was softened somewhat by over-performing corporate tax collections, which came in at $20.7 million above ?projections.
The overall State general fund contained $754.2 million, $37.0 million more than in February 2014.
This brings total state budget shortfalls to $90 ?million for the fiscal year.
The revenue report ?follows a State Budget Agency budget revision in December that, though predicting growth for 2015, lowered revenue estimates for the year from earlier predictions.
The budget will not be finalized until April, when the last revenue predictions for the year are released by the Department of Revenue.
State general fund revenues for February were $745.4 million, which is $1.9 million (0.3 percent) below the estimate based on the Dec. 18, 2014, revised forecast.
Sales tax collections were $535.6 million for February, which is $19.2 million (3.5 percent) below the monthly estimate.
Individual income tax collections totaled $124.1 million for the month, which is $6.6 million (5.1 percent) below the revised monthly estimate.
Corporate tax collections were $7.8 million for the month, which is $20.7 million (159.9 percent) above the revised monthly estimate.
Source: Indiana ?Department of Revenue
