Southern Indiana Business Report
INDIANAPOLIS – Indiana closed the 2021 fiscal year with reserves of $3.9 billion, Indiana State Auditor Tera Klutz announced July 14 .
“Indiana once again exceeded expectations and soared through the recession with one of the fastest recoveries on record to end with a cash reserve of $3.9 billion at the end of June,” said Auditor Klutz. “Indiana is poised to make an excess reserve transfer of $1.1 billion, which will be split between retirement funding and a refundable income tax credit for Hoosier taxpayers.”
The annual report, prepared by the State Budget Agency, highlights the state’s fiscal year ending on June 30.
Klutz credits strong fiscal leadership and teamwork for how Indiana was able to financially navigate through the national pandemic and economic uncertainty while ensuring a reasonable state reserve.
“Indiana’s economic future and fiscal responsibility are directly linked. Maintaining sustainable finances creates a better, stronger, more prosperous Hoosier state for the next generation,” added Klutz.
Cris Johnston, Office of Management and Budget director, echoed Auditor Klutz’s statements and added, “Years of fiscal discipline, sound tax policy, a resilient Indiana economy, and federal pandemic financial assistance are all reflected in these impressive year-end results which have presented the opportunity to make strategic investments which will benefit Hoosiers in the years to come.”
“The official revenue forecast on April 15 added $463 million to our projections for FY 2021,” said State Budget Director Zac Jackson. “In the last 75 days of the fiscal year, we exceeded those projections by an additional $1.222 billion. It’s unprecedented for the general fund reserve balances to increase by nearly $1.7 billion in less than three months.”
In Indiana, a reserve balance in excess of 12.5% of the next year’s budget is required to be split, with half dedicated to pay down pension obligations and the other half given back to taxpayers. According to the report, about $545 million will go to taxpayers and another $545 million toward pension liabilities.
“The newest state budget makes significant progress in paying down debt while also investing in proven programs and services that support all Hoosiers,” Dist. 65 State Rep. Chris May commented. “Our fiscally responsible policies, on top of our booming economy, will help pave the way for us to make future tax cuts and reforms. This tax refund is great news for taxpayers and it’s my goal to see that they keep more of their hard-earned money moving forward.”
While the final refund amount will not be calculated until later this year, early estimates suggest the refund could be as high as $170 per individual filer or $340 for joint filers. This will be the second time Hoosiers will receive an automatic taxpayer refund since the law passed in 2011.
Click here to view the full report.