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Fewer Collection Days Help Trigger State Revenue Slump

By Network Indiana

Posted May 6, 2011

Indiana‘s latest economic forecast is less than three weeks old, and tax collections are already falling short of projections. The state took in $87 million less than predicted in April.   Budget Director Adam Horst said underlying sales and tax withholding figures look strong. He said the shortfall may be due in part to calendar quirks.

"People actually had until April 18 to actually file their [income tax] returns. April also had one less business day, which means we had one fewer day to process those returns, essentially to get those dollars into our bank account. We also had an Easter holiday that was after the 15th this year, so that was another day that we lost," Horst said.

Horst said he‘ll watch the next two months‘ results before drawing any conclusions about where the economy may be headed. But he said the report is a reminder of the need to be cautious with spending. The monthly report comes six days after legislators sent Governor Daniels a new two-year budget assuming the state would outperform previous projections by $130 million over the three months remaining in the current fiscal year, and by $630 million over the next two years.

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