INDIANAPOLIS – The state’s budget forecasters are delivering discouraging news, estimating a shortfall of nearly $300 million in tax revenues from what they predicted just eight months ago.
The updated estimate comes less than two weeks after Republican Gov. Mike Pence ordered state agencies and universities to cancel $51 million in planned spending because of missed revenue targets.
The $297 million adjustment, disclosed to the State Budget Committee on Friday, represents a small dent in a two-year budget of just over $14 billion. But it’s enough to make fiscal leaders wary of granting Pence an ambitious wish list of more tax cuts and new spending on early childhood education.
“The revised downward forecast may be reflecting an abundance of caution, and I certainly hope that’s true,” said Senate Appropriations Chair Luke Kenley, a Republican from Noblesville who is a key gatekeeper to the biennial budget that runs until June 30, 2015.
But Kenley said he’s not willing to gamble on that, and cast serious doubt that the Legislature would reopen the budget process for the governor when it goes into its 2014 “short” session in early January.
The revised forecast delivered to the budget committee, made up of fiscal leaders from both the House and Senate, estimates about 2 percent less revenues from the state’s major tax sources. That includes $179 million less in sales tax than originally anticipated for 2014, and another $199 million less for 2015. Sales taxes are a major source of funds for local school districts.
In light of Kenley’s resistance to opening the budget in 2014 – a sentiment echoed by House Ways and Means Chairman Tim Brown of Crawfordsville – Pence has called on lawmakers to defy their fiscal leaders.
Earlier this week, the governor again called for a measure to reduce income taxes on families with children as part of what he calls a plan to promote marriage and childbearing in Indiana.