Brought to you by WBIW News and Network Indiana
Last updated on Tuesday, July 17, 2007
(UNDATED) - Indiana finished the just-ended fiscal year with about a quarter-billion dollars more in the bank than expected.
Auditor Tim Berry says Indiana posted a 474-million-dollar surplus for fiscal 2007, the state's first back-to-back surpluses in nine years.
Income taxes came in about four-percent higher than expected to help the state outperform its forecast.
Berry says the most important factor is that spending is growing a third as fast as it did when the state was in the red -- an average of 2.4 percent under Governor Daniels the last two years, compared to 5.9 percent from 1996 to 2004.
In fiscal 2005, state spending grew 2.7 percent in the second year of Governor Frank O'Bannon's final budget. O'Bannon's death in 2003 left Governor Joe Kernan presiding over the first half of that fiscal year, with Daniels in office for the final six months.
A chunk of the spending slowdown the last two years stems from Daniels' decision to cap the amount the state sets aside for property tax relief.
Berry says the state's still paying a quarter of every property-tax dollar, and shelling out 2.2 billion in relief, twice as much as it did five years ago.
The 474 million dollar surplus brings the state's total combined cash balance, including Medicaid and tuition reserve accounts and the state rainy-day fund, to just under 1.3 billion.
The state still owes local governments $422 million in make-up payments for delayed payments under O'Bannon to balance the books. Subtracting that leaves a net balance of almost exactly a billion dollars.
The net surplus is 7.9 percent of state revenue for the year. Berry says the state can't count itself on firm financial footing until that figure reaches 10-12 percent.
The new two-year budget, which began July 1st, repays the delayed payments, and is projected to end with a 9-point-5 percent surplus.
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