When the State of Indiana officially closed our fiscal books on June 30, we collected $1.24 billion dollars more than was last forecasted, which has created over $6 billion in reserves. In short, Indiana’s economy continues an unprecedented growth rate, thanks to employers and employees investing their time and talent right here at home.
You’ll recall our Automatic Tax Refund (ATR) formula kicked in earlier this year and the state began sending $125 to every taxpayer or $250 to those who file jointly, starting with those the Department of Revenue could transfer funds to electronically. Checks will be mailed for the remaining taxpayers beginning in August only because the specific paper supply required was delayed until then. Thank you for your patience.
But that delay could be a blessing in disguise.
That’s why I have called a Special Session to give an additional billion dollars back now, which would allow your August checks to read $350 versus $125. A 40-year high national rate of inflation is hitting Hoosiers daily and any tax funds the state holds beyond what is needed to operate state government and address unplanned events should be returned.
Hoosiers have long embraced speed. The General Assembly has the ability to act with swiftness this summer. We didn’t wait for a budget session in 2008 to permanently cap property taxes or earlier this year to cut personal income taxes and eliminate the utilities services tax. We acted quickly because the moment called for it.
Indiana’s active fiscal stewardship has positioned us well over the last couple of decades. Our AAA credit rating is a direct reflection of these ongoing efforts. The Pre-1996 Teachers Retirement Fund was originally expected to require state support through 2060. Through sustained discipline of making good on annual obligations as well as making $3.6 billion in additional contributions over the last two years, those appropriations are now on track to end by 2030 or sooner. In addition, we have paid off 26% of state debt obligations, helping us maintain our place as one of the states with the lowest debt per capita in the nation.
These prudent actions, coupled with the strength of Indiana’s economic rebound from the pandemic, position the state well to address a range of scenarios – including accounting for inflationary impacts on road and capital projects – when the next economic and revenue forecast is presented later this year. I will present a budget next year that calls for increases in K-12 education, state employee wages, our public health system and another round of READI programming because the need and local match is there.
And, contrary to some claims, sending all Hoosier taxpayers an upgraded $350 refund will not add to inflation. This “refund” is not like the trillions of federal dollars that were printed out of thin air and pumped into the national economy for months on end. These funds were already earned by taxpayers. Imagine if an employer said, “I’d give you a pay raise, my profits allow it, but that would just add to inflation, so please wait.”
Returning $350 this August will help Hoosiers at the pump, the grocery or even sending kids back to school. It is the fairest and fastest way to help. But, if there is a better idea to help Hoosiers now meet their household budgets, my sleeves are rolled up and I’m ready to pass a better plan when we all meet later this month.