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April Revenue Forecast Gives State More Cushion In Budget

By Brandon Smith

Posted April 16, 2013

The April revenue forecast unveiled Tuesday shows a $290 million increase from December projections, with the biggest predicted gains coming from individual income taxes.

Senate Appropriations Chair Luke Kenley says the new forecast is good news but cautioned against reading too much into it as budget negotiations progress over the next two weeks.

"I don't think one revenue forecast changes the dynamic too much except that it makes us feel a little more comfortable, obviously," he says.

Kenley and his House counterpart Tim Brown say tax cuts in the budget will likely amount to around $500 million a year. But they say that will be a mix of cuts, including the corporate tax, inheritance tax and income tax. Governor Mike Pence's proposed tax cut would cost the state $500 million per year just in income taxes.

Still, Pence says the new revenue projections indicate the state can have a budget that increases education and roads funding while providing across-the-board tax relief.

"I believe that lowering income taxes by 10 percent is the right thing to do and with a revenue forecast that projects $290 million more than we anticipated, I believe that it is fiscally prudent to do," he says.

Pence also says phasing out the state's inheritance tax should be part of the final budget. Eliminating the inheritance tax, which the Senate's budget does, would cost $150 million a year.

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