Photo: 401k (Flickr)
Governor Mitch Daniels says Christmas has come early for Hoosiers. He announced Tuesday an unexpected boost in revenue for the state.
Since 2007, corporations could pay their taxes to the state through “e-Check,” an online payment system. All taxes collected by the state are initially put into a collections fund and then moved, via a software program, to various funds. But due to a programming error, corporate taxes paid by e-Check, totaling nearly $300 million, did not get moved to the state’s General Fund.
Daniels says the mistake did not cost the state any money.
“The state always had the money,” he says. “The state always earned interest on the money. It was just sitting in this account and was not attributed to the General Fund.”
Adding that to greater-than-expected state revenue collection, the state budget surplus could now be as high as $1.6 billion, which would trigger an automatic taxpayer refund. Daniels says the greater-than-anticipated surplus better protects the state against future economic uncertainty. He advised a wait-and-see approach before deciding what, if any, changes in spending could be made.
But the tax refund would not kick in until at least July of 2012, and Indianapolis Democratic Representative Cherish Pryor says Hoosier families need help now.
“We can sit back and have money in the bank and say we’re going to wait until it’s raining,” she says. “For a lot of people, it’s a downpour.”
The Governor says the state will know more about its fiscal situation after new revenue forecasts are completed next week. The state is still looking into who made the programming error.