$320 Million In State Funds Found

It seems a bit hard to swallow. Despite the tough budgets the state of Indiana has faced since the economic downturn hit the nation in 2008, nobody noticed that tax payments made by corporations by electronic payment were being segregated from other tax revenues deposited into the state's general fund for the past four years. Gov. Mitch Daniels today announced that a Department of Revenue auditor discovered $320 million had accumulated in a collections fund last month. The state is now on track to end the current fiscal year with a $1.6 billion surplus. From the Northwest Indiana Times' Dan Carden:

"The state always had the money, the state always earned interest on the money, it was just sitting in this account and was not attributed to the General Fund," Daniels said.

The $320 million was moved into the General Fund on Dec. 1 and the state's accounting software was corrected to ensure future revenue would be transferred promptly.

Daniels was ebullient in noting that with the $320 million, Indiana now is sitting on more than $1.6 billion. That number includes the state's $1.2 billion budget surplus, plus the $117 million in tax collections that have come in above the state's revenue forecast through the first five months of the budget year.

"As far as I'm concerned, we just drew the Community Chest card-- bank error in your favor; collect not $200 but something much more," Daniels said.

Not everyone is happy with the announcement. Senate Minority Leader Vi Simpson (D-Ellettsville) is asking for an investigation into how the error occurred, complaining that Daniels cut education funding last year $300 million in an effort to shore up the state's budget. Given the fact that the state has been transferring surplus funds from special funds to free up money for the state's general fund, it does seem a bit odd that nobody noticed such a large amount of money accumulating in this so-called collections fund. I'm surprised nobody has tried to blame State Treasurer Richard Mourdock yet since he seems to be the media's second favorite punching bag behind Secretary of State Charlie White.