INDIANAPOLIS - Indiana’s tax collections were $72 million short of what state officials had hoped for in May, according to a new monthly revenue report released by Gov. Mike Pence’s administration on Friday.
The tumble below what a fiscal forecast committee in April projected that the state would take in does not represent a major blow, since the state is still $65 million ahead of that April revenue forecast for the year.
Much of the drop came in individual income tax collections, which were $87 million below the target in May after being $90 million ahead of target in April.
State Budget Director Chris Atkins attributed those two numbers to “an unexpected shift in the timing of individual income tax collections,” indicating that Pence’s administration is looking at the two months combined to get an accurate picture of the state’s finances.
“Total individual income tax collections are up 4.4 percent for the year to date despite the transfer of $185.3 million in individual income tax receipts into a local option income tax reserve since December 2012,” Atkins said.
Eleven months into the current fiscal year, Indiana has taken in $290 million, or 2.3 percent, more in taxes than it did in the previous fiscal year – an indication that the state’s economy is slowly improving even as the unemployment rate remains stubborn.
The $1.005 billion collected in May was $17 million more than Indiana took in during May 2012.
Sales tax collections, which indicate how much consumers are spending, topped the revenue projection by 1.1 percent – the first time those tax revenues have exceeded projections since February.
Pence pushed during this year’s legislative session to eventually reduce the state’s 3.4 percent income tax. It will drop by 3 percent in 2015 and by another 2 percent in 2017, which could further increase the importance of sales tax collections.