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Indiana Taxpayers Could Get $100 Each From Budget Surplus

By Brandon Smith

Posted July 3, 2012

Governor Mitch Daniels says Hoosiers could see next year's tax bills reduced by more than $100 per taxpayer.

Indiana's automatic taxpayer refund kicks in when the state's budget surplus exceeds an amount equal to 10 percent of the total state budget. Though the fiscal year, which ended Sunday, will not be officially closed-out for several days, Governor Daniels says estimates show the state will likely have reserves of more than $2 billion.

That would send at least $300 million back to taxpayers, with another $300 million earmarked for some of the state's pension funds. People will not get a check in the mail, they will see at least $100 taken off next year's tax returns.

Daniels says the state's financial picture will leave the next governor and General Assembly in a strong position.

"They'll have flexibility to invest, to spend, to cut taxes, some mix of all of those," he says.

Part of the state's surplus is built on the backs of state agencies, which are required to send back a percentage of their budgets to the general fund every year. During the recession, those reversion requirements were as high as 20 percent for some agencies. More recently, the targets have typically been around three percent.

Daniels says the reversions are meant as a way to make government more efficient, and even though the state's fiscal health is strong, he stills wants agencies to trim where possible.

"Because this national economy continues to struggle and could plummet again for all we know, our first job has always been to protect Hoosiers," he says.

Daniels says continuing to pad the state's reserves helps protect against things like government service cuts and significant tax increases.

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