Taxpayer Friendly Budget 2005-07

Watchdog Indiana Home Page Indiana 2005 House Bills 1001 &1120 Structural Deficit & Delayed Payments Governor's Budget 2005-07 Indiana House Budget 2005-07  Indiana State Finances

Indiana Governor Mitch Daniels has properly stated that any critics of his 2005-07 state budget "are morally obligated to stipulate their plan." Watchdog Indiana is meeting this challenge with the Taxpayer Friendly Budget, which is exactly the same as the Governor's budget except the two tax increases are eliminated.

The Taxpayer Friendly Budget has a June 30, 2007, cash balance of $342.5 million compared to $951.9 million in the Governor's budget. However, the Taxpayer Friendly Budget uses the same $646 million structural deficit found in the Governor's budget. The actual structural deficit is no more than $390.3 million. Therefore, the actual June 30, 2007, cash balance may be at least $255.7 million more than indicated.

Another way to increase the state's cash balance is to rein in some of the Governor's new spending. Excluding the two Taxpayer Friendly actions of extending the earned income tax credit and significantly increasing the annual teachers retirement contribution, the Governor proposes increases in 2005-07 spending that total $494.9 million. Surely some unneeded spending can be found in this nearly half-billion dollars of new spending.

It is perfectly reasonable for informed Hoosiers to expect spending restraint from the Governor instead of tax increases. As detailed in the State Spending Data, total per capita state spending in the 2003-04 fiscal year increased 10.33 percent, or 3.16 times more than inflation, from the prior fiscal year. The state government already has more than enough money without tax increases. 

The spreadsheet presentation of the Watchdog Indiana Taxpayer Friendly Budget is below.

Taxpayer Friendly Budget

General Fund and Property Tax Replacement Fund

Fiscal Years 2005-2006 and 2006-2007

(in millions of dollars)

(Compiled March 13, 2005)

Fiscal Year / Percent Increase (Decrease) From Prior Year

Revenue Source

2003-04

2004-05

2005-06

Change

2006-07

Change

Sales Tax

2,316.1

2,456.3

2,572.4

2,697.6

Individual Income Tax

3,274.8

3,522.3

3,705.6

3,944.2

Corporate Income Tax

644.7

811.7

754.6

777.8

Cigarette & Tobacco Products Tax

283.8

292.9

295.9

299.2

Alcoholic Beverage Taxes

14.2

14.1

14.1

14.2

Inheritance Tax

140.0

135.0

120.0

120.0

Insurance Tax

175.1

175.7

175.7

175.7

Interest

38.3

34.2

49.3

54.0

Other

193.4

190.0

190.0

190.0

SUBTOTAL General Fund Forecast

7,080.4

7,632.2

7,877.6

3.22%

8,272.7

5.02%

Sales Tax

2,404.9

2,500.4

2,614.7

2,741.9

Individual Income Tax

533.1

579.8

603.2

642.1

Gaming

601.5

599.9

641.0

700.0

SUB Prop. Tax Replacement Forecast

3,539.5

3,680.1

3,858.9

4.86%

4,084.0

5.83%

TOTAL Forecast Revenue

10,619.9

11,312.3

11,736.5

3.75%

12,356.7

5.28%

Federal Revenue Sharing (DSH) (1)

58.8

60.2

61.6

Tobacco Master Settlement (1)

35.0

38.1

38.1

AVAILABLE RESOURCES

11,834.8

12,456.4

Expenditure Type

2003-04

2004-05

2005-06

Change

2006-07

Change

General Government

(274.0)

(294.8)

(367.1)

24.52%

(369.2)

0.57%

Corrections

(619.4)

(608.2)

(626.8)

3.06%

(627.0)

0.03%

Other Public Safety

(106.0)

(107.6)

(114.5)

6.41%

(114.2)

(0.26%)

Conservation and Environment

(70.9)

(79.9)

(85.8)

7.38%

(85.8)

0%

Economic Development

(42.1)

(53.4)

(48.5)

(9.18%)

(48.5)

0%

Transportation

(0.5)

(0.5)

(0.5)

0%

(0.5)

0%

Mental Health

(223.8)

(243.2)

(251.8)

3.54%

(251.9)

0.04%

Public Health

(74.0)

(74.3)

(75.3)

1.35%

(75.3)

0%

Medicaid

(1,243.8)

(1,388.2)

(1,455.3)

4.83%

(1,525.2)

4.80%

Family and Children

(263.7)

(217.6)

(195.0)

(10.39%)

(195.0)

0%

Social Services and Veterans

(278.8)

(287.9)

(329.0)

14.28%

(353.2)

7.36%

Higher Education

(1,464.1)

(1,524.1)

(1,536.2)

0.79%

(1,546.2)

0.65%

Education Administration

(42.4)

(56.0)

(57.0)

1.79%

(57.0)

0%

Tuition Support - General Fund

(1,820.0)

(1,849.3)

(2,085.7)

12.78%

(2,088.2)

0.12%

Tuition Support - PTR Fund

(1,820.0)

(1,849.3)

(1,635.3)

(11.57%)

(1,635.3)

0%

Social Security - Teachers

(2.4)

(2.4)

(2.4)

0%

(2.4)

0%

Teachers Retirement

(305.5)

(346.8)

(549.9)

58.56%

(581.6)

5.76%

Other Local Schools

(220.9)

(187.3)

(186.3)

(0.53%)

(186.3)

0%

Other Education

(11.0)

(11.8)

(11.9)

0.85%

(11.9)

0%

PTR and Homestead Credits (2)

(2,479.8)

(2,232.1)

(2,282.1)

2.24%

(2,456.1)

7.62%

Distributions - General Fund

(48.3)

(13.4)

(14.7)

9.70%

(14.9)

1.36%

Earned Income Tax Credit Extend (3)

(49.7)

SUBTOTAL Operating Budget

(11,411.6)

(11,428.0)

(11,911.0)

4.23%

(12,275.4)

3.06%

Higher Education Construction

(6.4)

(6.4)

(12.8)

100.00%

(12.8)

0%

Other Construction

(174.8)

(222.3)

(191.0)

(14.08%)

(189.9)

(0.58%)

SUBTOTAL Capital Budget

(181.2)

(228.7)

(203.8)

(10.89%)

(202.7)

(0.54%)

TOTAL EXPENDITURES

(11,592.8)

(11,656.7)

(12,114.7)

3.93%

(12,478.0)

3.00%

2003-04

2004-05

2005-06

Change

2006-07

Change

REVENUE SHORTFALL

(279.9)

(21.6)

MISCELLANEOUS ADJUSTMENTS

(6.3)

(7.0)

CASH BALANCE

658.9

372.7

(43.44%)

344.1

(7.67%)

ON-GOING STRUCTURAL DEFICIT

251.6

(180.0)

INDIANA STATE BUDGET AGENCY SOURCES:

A. Forecast Revenue information from the December 14, 2004, State Revenue Forecast.

B. Expenditure information from the January 18, 2005, Budget Briefing.

C. Cash Balance (Combined General Fund/PTRF Balance) from the January 18, 2005, Budget Briefing.

D. On-Going Structural Deficit information from the January 18, 2005, Budget Briefing.

NOTES:

1. Revenue information from the January 18, 2005, Budget Briefing.

2. 2005-07 Prop. Tax Replace. and Homestead Credit increases from January 18, 2005, Budget Briefing.

3. March 2, 2005, Legislative Services Agency Fiscal Impact Statement for House Bill 1083.

 

Watchdog Indiana Home Page Indiana 2005 House Bills 1001 &1120 Structural Deficit & Delayed Payments Governor's Budget 2005-07 Indiana House Budget 2005-07  Indiana State Finances

This page was last updated on 03/19/10 .