INDIANAPOLIS | Gov. Mitch Daniels has a plan that could put money in the pockets of Indiana taxpayers years after he leaves office.
The Republican governor plans to ask the Indiana General Assembly next month to establish an automatic taxpayer refund program that would return excess state revenue back to taxpayers without requiring any additional action by the Legislature.
Daniels said the details of the plan still are being negotiated, but the idea is that once Indiana has built up a 10 percent budget reserve, any extra revenue that comes in on top of that reserve could not be spent and would have to be refunded to taxpayers.
Current state law does not require any refund of tax revenue, and the General Assembly has the authority to spend it, save it or refund it.
Daniels said he wants to make sure legislators remain as fiscally responsible in good times for state revenue as they have in the current bad time.
State revenue has come in below projections for the past two years, forcing Daniels to cut school and state agency budgets and spend nearly all of the state's reserve funds to keep Indiana's budget balanced.
The state revenue forecast for the budget period that starts in July is more optimistic, but Indiana is not likely to reach the 10 percent reserve threshold until at least the end of the 2014-2015 budget period. Daniels' second and final term as governor ends in 2012.
At least one potential 2012 gubernatorial candidate says he supports Daniels' taxpayer refund plan. Republican State Treasurer Richard Mourdock said "it is a straightforward proposal that makes sense."
"Now is the time to act and prevent the state from holding funds beyond a minimum amount needed to finance government programs," Mourdock said.
Daniels is likely to fill out the details of his plan when he addresses the Republican-controlled General Assembly for the State of the State address on Jan. 11. He first pitched the tax refund proposal two years ago while running for re-election.