INDIANAPOLIS — Indiana’s monthly revenues missed projections by $70 million, though year-to-date the state still exceeds projections by $30 million.
“Revenues missed their estimate across all major categories,” said Cris Johnston, the director of the Indiana Office of Management & Budget during a Friday news conference. “The closure of the casinos (on March 16) was a significant factor.”
Though April and June typically bring in the most revenue, Johnston said that wasn’t anticipated this year.
“It’s going to put significant pressure on our budget through the rest of this fiscal year,” Johnston said. “We know that the descent will be steep and rapid (but) what we don’t know, for sure, is what the pace of the recovery will be.”
Johnston outlined the three federal packages related to COVID-19: The Coronavirus Preparedness and Response Supplement Appropriation Act on March 6, The Family First Coronavirus Response on March 18 and The Coronavirus Aid Relief and Economic Securities Act on March 27.
The first act included $10.6 million for the Indiana State Department of Health, primarily meant to cover the purchasing costs of Personal Protective Equipment.
The second package addressed food and nutrition programs as well as paid leave related to COVID-19.
Finally, near the end of March, the CARES Act earmarked billions in funds for small businesses and $1,200 checks for most Americans, all designed to stimulate a rapidly devolving economy.
“It is anticipated that the state will receive over $3 billion (from the CARES Act),” Johnston said, noting the number was an estimate.
Departments receiving funding under the CARES Act in Indiana include the Indiana Family and Social Services Administration for child welfare services; the Indiana Department of Workforce Development for an additional $600 in unemployment benefits per beneficiary; the Indiana Department of Agriculture for food assistance; the Indiana Office of Community and Rural Affairs for housing assistance; and the Indiana Department of Justice for Justice Assistance Grants.
Under the Education Stabilization Fund from the federal government, Indiana schools will receive funding based on their allotted Title I funding while higher education institutions will receive funding based on their mix of students with Pell Grants.
The largest portion of the funding, the Coronavirus Relief Fund, at $250 billion, will be used to cover necessary expenditures incurred under the national public health emergency for the majority of 2020. The U.S. Treasury assured states they would need to strictly comply with rules to not use the funding as revenue replacement.
The CARES Act also earmarked $367 billion for small businesses in “forgivable” loans to be used to cover expenditures such as payroll, mortgages or rent.
Some economic leaders remained partially optimistic, noting that the state had 62 projects representing more than 11,000 jobs in the planning stages.
“”I would say that we think the structure we have in place is going to speed up the recovery … we remain strong as a state and we’ll continue to work,” said Jim Schellinger, the Secretary of Commerce. “That effort will continue to protect our very attractive, rational and reasonable tax and regulatory environment. The world will wake up again. We will rise again.”
With the total economic impact of the coronavirus uncertain, Johnston’s department will have much to consider over the summer as the finalize revenue projections before lawmakers meet in January to draft a new budget.
“Because of what we’re fearing in the next couple of months, I think that data is going to be important to incorporate in whatever finalized modeling we have to do,” Johnston said.
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