Indiana’s revenue forecast is heavy on positives

Source: Indiana Chamber of Commerce

“Indiana is on solid footing.” That’s how the economist giving Indiana’s economic forecast to the State Budget Committee last Thursday opened his presentation.

The economist offered a positive outlook, pointing out that all key economic indicators (payrolls, unemployment rates, wages, incomes and consumer consumption) are encouraging. It is largely that positive view that lays the foundation for the revenue forecasters to project the tax collections.

Yet “solid footing” may be something of an understatement considering the revised tax collection projections presented by revenue forecasters following the economist’s comments. The revenue forecast detailed just how much additional money is now expected to come in above what was forecasted last April when the biennium budget was passed. The new projections add $1.87 billion in the first fiscal year of this budget and another $1.43 billion in the second fiscal year. For context, those dollars roughly equate to 10% of our total budgeted appropriations for the biennium. That’s a lot of new money. Those totals reflect the anticipated growth in each of the general fund taxes: sales, individual income and corporate income taxes. All of these, as well as gaming and other tax revenues, are trending upward.

Again, the bottom line: No matter how you look at it, Indiana’s fiscal picture is good. The economic outlook: positive. Revenue collections: strong. Surplus balances: healthy.

The economic forecast presentation and the revenue forecast update are both found at the State Budget Agency web site. The presentations themselves are recorded and will soon be available to watch (go to the archived meeting video). If you watch the video, you will also hear the Medicaid forecast and a report from the Office of Management and Budget regarding federal legislation distributions.