Friday, June 30, 2006

State Budget Surplus Or Not?

There's an old saying that "figures never lie but liars always figure." That may come into play in the debate over whether the state of Indiana will end the current fiscal year today with a surplus. State budget officials are optimistic that the state will end the year with the first balanced budget in many years according to an AP report. But an item posted by WISH-TV political reporter Jim Shella on his blog raises questions about how the state will arrive at its so-called "balanced budget." Shella writes on June 26:

A viewer waiting on his overdue state income tax refund forwarded the following response from the Indiana Department of Revenue:

"I sent you an email just this morning explaining why your refund was not generated. The Department has placed a freeze on all refunds for the end of the fiscal year. However, your refund is still in process and once the freeze has been lifted you will receive your refund. I was hoping your refund was generated prior to the freeze but it was not, please just be patient. "

Do you think the Daniels Administration is managing cash flow to insure a balanced budget on June 30?


Don't forget Gov. Daniels served as Bush' budget director before becoming Governor. When I worked as a budget analyst for the Illinois legislature, smoke and mirrors were often used to achieve a balanced budget, including delayed payment of income tax refunds. Frustrated by the Thompson administration's use of delayed tax refunds to improve Illinois' ledger back in the 1980s, I drafted legislation for a Republican lawmaker which required a certain percentage of income tax revenues to be diverted to an income tax refund account as a truth in budgeting measure. The Department of Revenue was compelled by the legislation once it became law to pay out refunds promptly from this fund, thereby eliminating this budget gimmick. Perhaps Indiana needs a similar law.

3 comments:

Anonymous said...

Yesterday I got a postcard from my State Senator (David Long, Fort Wayne R and Senate Majority Leader) crowing about the surplus. I guess he should have thanked the taxpayer referenced here.....

Anonymous said...

did the surplus include the 3.8 bil they just got this week? I can't tell.

Advance Indiana said...

That should not be counted in the mix. I believe the budget numbers on which a projected surplus are based consists of general funds.