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Virus downturn knocks Indiana surplus down $850 million

Plunging tax collections caused by the coronavirus pandemic have delivered a $850 million hit to Indiana’s state budget reserves, and a top state official said Thursday he anticipates possibly steep spending cuts in the coming years.

Posted: Jul 16, 2020 9:25 PM

INDIANAPOLIS (AP) — Plunging tax collections caused by the coronavirus pandemic have delivered a $850 million hit to Indiana’s state budget reserves, and a top state official said Thursday he anticipates possibly steep spending cuts in the coming years.

Indiana closed the 2020 fiscal year June 30 with about $1.4 billion in reserves — a drop of 37% from the state’s nearly $2.3 billion a year ago, state budget officials announced.

That stems from a $1.5 billion, or 23%, drop in tax revenue for the four months since widespread business closures and other restrictions prompted by the coronavirus outbreak started in March.

Officials have not ordered any layoffs of state employees, but have over the past few months implemented a widespread hiring freeze, directed most state agencies to cut spending by 15% for the coming year and told state universities to expect a 7% reduction in state funding.

Cristopher Johnston, director of the state’s Office of Management and Budget, said no quick turnaround was expected.

“We will most likely need more austere budgets,” Johnston said. “We will mostly likely need greater (spending cuts) to manage the uncertainties ahead.”

Indiana’s budget figures largely do not incorporate the $2.4 billion designated to the state from the federal coronavirus relief package, said Johnston, who is Republican Gov. Eric Holcomb’s top budget adviser.

Congress has restricted that money for coronavirus-related spending and is not allowing states to use it to replace lost tax revenue, but Johnston said the state was holding back on decisions in case that changed.

The top Democrat on the budget-writing House Ways and Means Committee sent a letter this week to Holcomb urging more public discussion about spending the federal funding.

Rep. Greg Porter of Indianapolis said the state needed to direct money toward actions such as buying personal protective equipment for schools, local government and home health care workers, covering the expenses of expanded mail-in voting and assisting minority communities disproportionately hit by COVID-19 illnesses.

“As the state continues to develop new plans, policies and programs to prepare for the current and foreseeable impacts of COVID-19, I encourage you to rely on fellow lawmakers and community leaders to establish an equitable and sustainable funding framework for Indiana,” Porter wrote to Holcomb.

State government could see some financial improvement as it tallies income tax payments coming in since the federal and state tax returns deadline was pushed back from April 15 until July 15.

Nearly 60% of Indiana’s tax revenue shortfall came from lower-than-anticipated personal and corporate income taxes, although Johnston did not want to estimate how much of that could eventually be collected.

“I think I would be foolish to speculate that we’re going to get 100% collections,” he said. “We are certainly hoping for the best.”

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Indiana Coronavirus Cases

Data is updated nightly.

Confirmed Cases: 69975

Reported Deaths: 3007
CountyConfirmedDeaths
Marion15152724
Lake7222273
Elkhart468079
Allen3695160
St. Joseph322479
Hamilton2572104
Vanderburgh180013
Hendricks1796105
Cass17609
Johnson1674118
Porter121339
Clark112646
Tippecanoe112311
Madison87265
LaPorte85029
Howard82965
Kosciusko82412
Marshall75222
Bartholomew74947
Floyd72945
Monroe69930
Delaware66552
Dubois65512
Boone64946
Noble63829
Hancock63438
Jackson5564
LaGrange54910
Warrick54030
Shelby53027
Vigo52810
Grant51129
Dearborn47728
Morgan44034
Clinton3883
Henry36519
White34910
Montgomery34321
Wayne33710
Lawrence33227
Decatur32232
Harrison30422
Miami2602
Scott25210
Daviess25119
Greene24034
Putnam2348
Franklin23113
DeKalb2224
Jasper2162
Jennings21412
Gibson2044
Steuben2033
Ripley1947
Perry17212
Starke1707
Orange16424
Fayette1637
Posey1610
Wabash1613
Jefferson1532
Carroll1522
Fulton1502
Whitley1496
Wells1442
Knox1400
Tipton1266
Huntington1193
Washington1171
Spencer1163
Newton11410
Randolph1094
Clay1025
Adams842
Sullivan831
Jay820
Owen821
Rush804
Pulaski751
Brown701
Fountain642
Benton600
Blackford562
Ohio564
Pike500
Parke491
Vermillion470
Crawford440
Switzerland430
Martin420
Union330
Warren191
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COVID-19 Important links and resources

As the spread of COVID-19, or as it's more commonly known as the coronavirus continues, this page will serve as your one-stop for the resources you need to stay informed and to keep you and your family safe. CLICK HERE

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