INDIANAPOLIS | State tax collections over the next 18 months are expected to dip slightly compared to earlier estimates, but the revenue loss should not require spending cuts or other extraordinary measures to keep Indiana's budget balanced.
According to the revised revenue forecast presented Thursday to the State Budget Committee, Indiana will take in $174.9 million less than predicted by the April 16 forecast used in shaping the state's two-year spending plan.
However, after accounting for budgetary changes enacted by the Legislature following the first revenue forecast, the actual revenue estimate is down just $72.7 million, or less than 1 percent of the $30.3 billion in anticipated tax revenue for the 2016-17 budget years.
State Budget Director Brian Bailey said the revenue difference is easily manageable, either through spending the surplus built in to each year of the budget or drawing on predicted savings from lower than expected Medicaid costs.
Indiana's revenue estimates are crafted by the bipartisan Revenue Forecast Technical Committee, which includes representatives from both the legislative and executive branches so all Hoosier policymakers work off the same revenue data.
State Rep. Tim Brown, R-Crawfordsville, chairman of the House Ways and Means Committee, said he is not concerned that Indiana may have slightly less money available in the months ahead.
"I'm of the opinion that government always needs to have a tight belt and always be looking out not to spend more than it takes in," Brown said. "You get bigger, bigger, bigger government if you have more resources than you know how to spend."
However, state Sen. Karen Tallian, D-Ogden Dunes, a member of the State Budget Committee, said she is concerned the reduced sales tax collections predicted by the revised revenue forecast mean Hoosiers aren't earning enough to afford life's necessities.
"There is no way around it, Indiana's economy is flat-lining," Tallian said. "Forecasters are predicting what Hoosier households already know: incomes are stuck in a decade-long holding pattern."
She said the Republican-controlled Legislature must consider raising Indiana's minimum wage above the federal rate of $7.25 per hour during its 10-week session that convenes Jan. 5.