INDIANAPOLIS – State Senator Karen Tallian (D-Portage) released the following statements this morning after the bipartisan State Budget Committee received a briefing on the revenue forecast for the next biennium.
“The buzz word around the Statehouse the last few years has been ‘data-driven’ and there is no doubt that the GOP will evoke that phrase again in crafting their next budget. However, the data is what seems to be ignored.
“Again this fiscal year, state revenues have not met what non-partisan fiscal experts have predicted. Again, the state has to revise down our revenue expectation for 2016 in the face of data realities.
“Sales and Use taxes, the largest source of revenue for the state, show that Hoosiers are not buying products. This could be due to the fact that they are unable because of low wages, or unwilling as a result of a lack of confidence. If our constituents are doing well, the data does not show it.
“Income tax revenues are also questionable. Individual income taxes are steady, but do not reflect a surging economy. Corporate income taxes are still subject to more tax cuts for the next few years.
“In general, though we have had tax cuts and IEDC spends unknown millions to promote business growth, we are not seeing such a rosy picture. The revenue forecast had to be revised down for fiscal year 2017 reflecting declining collections.
“It is clear Indiana won’t have a lot of extra money to put into the next budget. The spin on these numbers is all about what you compare it to. If you look at what we previously forecasted, we are really more flat than growing. Obviously, we have to look at the actual receipts between now and April.
“Whether Democrats or Republicans are in charge of state government, it’s in our culture to responsibly manage the state’s fiscal condition. During the great recession, the state’s budget was balanced through the use of reserves, agency cuts, and the relief that came from federal stimulus funds. The revenue growth numbers forecast today are fairly weak in the time of national economic expansion. Back in the 1990’s, when Democrats were in control, we had over 5% revenue growth throughout the entire decade without tax increases.
“I’m concerned about the sustainability of our tax revenue, especially in light of the corporate rate cuts that continue to phase down until 2021.